Westinghouse Air Brake Q2 2026 Earnings Call: Complete Transcript

Westinghouse Air Brake (NYSE: WAB ) released second-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. This content is powered APIs. 5% year-over-year, and adjusted EPS growth of 22%.

90, reflecting an improvement in revenue and margin expectations. Operational highlights include a significant $1 billion order from Australia and a $184 million positive train control order with VALE in Brazil, indicating strong international demand. 9%, aided by the Dellner acquisition. 0, contributing positively to margin expansion.

The company's backlog remains robust, with a 12-month backlog up 11% and multi-year backlog up 42%, providing strong visibility into future revenue. The call highlighted the continued demand for digital and automation solutions internationally, signaling strategic growth areas. Despite challenges with tariffs and unfavorable business mix, the company achieved better-than-expected operating margins and cash flow generation. Full Transcript OPERATOR Good day and welcome to the Westinghouse Air Brake second quarter 2026 earnings conference call.

All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchtone phone.

To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Kyra Yates, Vice President of Investor Relations. Please go ahead.

Kyra Yates, Vice President of Investor Relations Thank you, operator. Good morning everyone and welcome to Westinghouse Air Brake's second quarter 2026 earnings call. With us today are Chairman and CEO Rafael Santana, CFO John Olin and Senior Vice President of Finance John Mastelers. Today's slide presentation along with our earnings release and financial disclosures were posted to our website earlier today and can be accessed on the Investor Relations tab.

Some statements we are making are forward-looking and based on our best view of the world and our business today. For more detailed risks, uncertainties and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and presentation. We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and reconciliation tables carefully as you consider these metrics. I will now turn the call over to Rafael.

Rafael Santana, Chairman and CEO Thanks, Kyra, and good morning everyone. We are proud of the progress we have made in the first half of the year which is strengthening our position as a leading industrial technology company. It reflects the strength of the leadership position we continue to build across our portfolio and the continued focus of the Westinghouse Air Brake team to deliver for our stakeholders. With that, let's move to slide 4.

I'll start with an update on our business, my perspectives on the quarter and progress against our long term value creation framework and then John will cover the financials. We delivered a strong first half of the year which exceeded our expectations despite tariff headwinds, unfavorable business mix and challenging prior year comparisons. Through disciplined execution across the organization, we achieved robust growth, expanded margins and delivered double digit earnings per share growth.

Looking ahead to the second half, I remain encouraged by the healthy pipeline and continued demand for our core products and services, the profitable growth of our 12 month and multi year backlogs and our focus on driving productivity and efficiency. This momentum is evident in our second quarter operational execution and our overall financial results. 5% and adjusted EPS was up 22% from the year ago quarter. Total cash flow from operations for the quarter was $441 million.

Backlog remains a key strength. 12 month backlog was up 11% from the prior year while the multi year backlog exceeded $30 billion, up 42%. Our financial position remains strong. We continue to execute against our capital allocation framework and expect to continue to compound long term value for our shareholders, shifting our focus to slide 5 let's talk about our 2026 end market expectations in more detail.

While key metrics across our freight markets remain mixed, we continue to be encouraged by the overall strength and resilience of our business. We are seeing solid momentum in our international markets and the pipeline of opportunities across geographies remains strong. In North America, carload traffic was up 4% in the quarter. As a result of this growth, Westinghouse Air Brake and industry's active locomotive fleet was up compared to last year's second quarter.

Internationally, carload growth during the quarter was mixed, but the long term carload growth trends continue to be robust. Significant investments to expand and upgrade infrastructure are driving our international orders pipeline. Looking at the North American railcar built, the industry forecast for new railcar is slightly up compared to prior quarter and is now projected to be approximately 25,000 cars for 2026 wh