Wabtec’s Q4 Forecast Boosted by Strong Global Locomotive Demand

Surge in Global Sales and Strategic Expansion Drive Growth

Wabtec, a leader in locomotive manufacturing, is forecasting a significant profit boost in Q4, underpinned by a global surge in locomotive demand. CEO Rafael Santana highlighted that the demand is currently the strongest it’s been in the past five years, propelled by increasing international sales and infrastructure investments. This growth is expected to be fueled by key agreements and the company’s expanding role in the global transportation sector.

Key Growth Drivers: Infrastructure Upgrades, Mining, and Transit Equipment

Several factors are converging to drive Wabtec’s growth across markets:

• Global Infrastructure Investments: With governments focusing on upgrading transportation infrastructure, especially in the context of sustainability, Wabtec is seeing a rise in demand for advanced, environmentally-friendly locomotives. As countries invest in rail networks, particularly in emerging markets, the demand for modern locomotives and related technologies has surged.

• Mining Equipment Demand: The mining sector has also been a significant growth driver. Rising commodity prices have led to an increased demand for mining technology, with companies replacing aging fleets of mining equipment. Wabtec’s mining technology division is benefiting from this trend, securing high-value contracts and capitalizing on the need for upgraded machinery in the resource extraction industry.

• Public Transit Fleet Refurbishments: The global focus on reducing carbon emissions has fueled demand for sustainable transit solutions. Wabtec has experienced heightened demand in public transit, driven by the need for fleet refurbishments and expanding ridership, which has been further accelerated by environmental regulations and carbon reduction initiatives.

Strategic Global Partnerships and Major Contracts

Wabtec’s expansion is supported by several notable international agreements:

• Kazakhstan: The company secured a $405 million deal with Kazakhstan Temir Zholy (KTZh) to supply locomotives for the Trans-Caspian route. This agreement reflects Wabtec’s growing presence in Central Asia and its manufacturing footprint in Kazakhstan through its Lokomotiv Kurastyru Zauyty plant in Astana.

• Germany: A $70 million collaboration with Siemens Mobility will see Wabtec providing passenger information systems for Munich’s S-Bahn trains, marking a significant expansion into Europe.
• India: Wabtec extended its $30 million service agreement with Indian Railways, reinforcing its position in the Indian market, which is seeing rapid growth in rail infrastructure investments.
• North America: The company also secured a long-term $300 million parts agreement with a Class I railroad, further cementing its strong foothold in the North American market.

Strong Q3 Results Reflecting Market Demand

In its Q3 earnings report, Wabtec posted an 18% increase in profits to $286 million, compared to the same period last year. Net sales grew by 4.4% year-over-year, reaching $2.7 billion. These figures underscore the company’s ability to leverage favorable market conditions and secure high-value contracts across its diverse business segments.