Westinghouse Air Brake Technologies Corp. (WAB) recently declared a dividend of one cent per share and watched Wall Street hike forecasts after it delivered a strong second quarter.

Company Description

Wabtec Corporation is a global company servicing the rail industry. Through its subsidiaries, the company manufactures products for locomotives, freight cars and passenger transit vehicles. Wabtec also builds new switcher and commuter locomotives, and provides aftermarket services.

Growth Through Expansion

The company recently announced that it expanded its presence in South Africa by establishing joint ventures to manufacture, supply and service its broad range of products in the region.

“Wabtec has provided products, from brakes shoes to electronic braking, to the African market for many years,” said Albert J. Neupaver, Wabtec’s president and chief executive officer. “By establishing a local presence in South Africa, we are making a commitment to expand our production and service capabilities in this growing market. We believe customers will benefit from faster response time and direct access to all of Wabtec’s products and services.”

Income

This Growth and Income company declared a quarterly dividend of one cent per share in late July. Wabtec noted that the dividend is payable on Aug. 31, 2008 to holders of record on Aug. 15, 2008.

Record Growth in the Second Quarter

On July 22, the company posted a robust second quarter. Sales increased 20% year-over-year, reaching a record total of $390 million. Second-quarter earnings per share of 69 cents surpassed the year-prior 57 cents and exceeded the consensus estimate by 6%.

The company mentioned that its second quarter performance was strong, with a variety of initiatives driving growth Incorporatedluding international and aftermarket expansion.

Wabtec’s return on equity (ROE) of 20% stands above the industry average of 13%. The company’s earnings per share are expected to grow by 14% over the next 3 – 5 years, which also tops the industry average of 10%.

Increased Guidance

The company upped its full-year 2008 earnings outlook to approximately $2.65 per share thanks to the strong second quarter and WAB’s forecast for the rest of the year.

Analysts also see a bullish future. All 5 covering analysts boosted 2008 earnings projections from last month’s $2.61 per share to $2.67.

Content Courtesy: Zacks Investment Research

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