Rail technology provider Wabtec saw fourth-quarter 2021 net income grow 116% to $190 million, or $1.02 per diluted share, compared with $88 million, or 46 cents per diluted share, in the fourth quarter of 2020.
Adjusted earnings per diluted share was $1.18, which is 20.4% higher year-over-year.
A higher gross profit in the fourth quarter, due to higher sales as well as lower cost of sales, helped pull fourth-quarter net income higher. Gross profit rose 29% to $652 million, compared with $506 million in the fourth quarter of 2020. Fourth-quarter 2021 net sales were $2.07 billion, compared with $2.02 billion in the fourth quarter of 2020, while fourth-quarter 2021 cost of sales was $1.4 billion, compared with $1.5 billion in Q4 2020.
Operating expenses were $388 million, compared with $345 million year-over-year.
“The Wabtec team delivered strong execution to close out the year, providing us with momentum into 2022,” President and CEO Rafael Santana said in a release. “Our productivity initiatives, realization of synergies and positive mix drove improvement in segment margins for both the fourth quarter and full year despite growing supply chain disruptions and higher costs.”
Freight segment sales rose 6.4% to $1.4 billion on demand for services and components as well as amid the acquisition of maintenance-of-way equipment manufacturer Nordco. Lower deliveries of locomotives and increased supply chain disruptions offset these gains.
Transit segment sales slipped 5.4% to $648 million on supply chain issues, COVID-related disruptions and unfavorable foreign currency exchange, Wabtec (NYSE: WAB) said.
Wabtec’s 12-month order backlog rose 13.5% in 2021 to nearly $6.3 billion, compared with $5.5 billion for 2020, mostly because of increased orders for freight equipment and freight services.
As Wabtec looks at 2022, it gave sales guidance in the range of $8.3 billion to $8.6 billion, compared with net sales of $7.8 billion in 2021 and nearly $7.6 billion in 2020. Adjusted earnings per diluted share is anticipated to be in the range of $4.65 to $.5.05, compared with $24.26 for 2021.
In an earnings call with investors Wednesday, executives said an anticipated increase in industrywide railcar deliveries will provide support in 2022, while inflation and higher materials costs could be a potential headwind for the year.
Meanwhile, as the freight rail industry considers alternatively fueled locomotives, the transition might be an “evolutionary” one versus a “revolutionary” one because steppingstone technologies can be applied to an existing fleet and can be less disruptive to operations, according to Santana. These next-generation locomotives could also be deployed in a hybrid consist or in tandem with other technologies that enable further fuel or operational efficiency.
“It’s going to be more evolutionary as we get to the next couple of years,” Santana said.
Just this year, Wabtec and Union Pacific (NYSE: UNP) announced that UP would be acquiring 10 battery-electric locomotives from Wabtec as part of a plan to test 20 battery-electric locomotives in rail yards in California and Nebraska.
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