Wabco Posts Record Quarterly Earnings
Commercial vehicle supplier Wabco Holdings Inc. reported second-quarter and six-months net income and revenue jumped, and posted record quarterly earnings per share.
For the period ended June 30, net income climbed 12% to $87 million, or $1.61 per share, compared with $75 million, or $1.33, a year earlier.
Revenue rose 8.6% to $795 million, compared with $732 million in the 2016 period.
Further, according to analysts, Wabco unexpectedly reported that it received a takeover offer during the quarter that had made it through due diligence before discussions were terminated.
For the six months, net income surged to $168 million, or $3.09, compared with $62 million, or $1.09, a year earlier.
Revenue inched up to $1.5 billion, compared with $1.4 billion in the 2016 year-to-date period.
In the quarter, the company “continued to demonstrate strong outperformance of the commercial vehicle industry relative to global truck and bus production,” Chairman and CEO Jacques Esculier said in a statement. “In addition, we delivered record quarterly earnings per share on a performance basis, up 18% year over year.”
He said the second quarter marked further adoption of Wabco’s safety and efficiency technologies globally.
“For example, in key markets like North America we augmented sales of automated manual transmission solutions and collision mitigation systems, while in China and India we increased penetration of anti-lock braking systems.”
North American sales for the quarter increased 23% — 25% excluding foreign currency translation effects — driven by increased penetration of automated manual transmissions, OnGuard collision mitigation systems and electronic stability control systems in the market as well as further growth in the aftermarket, the company said.
About 17% of its sales are in the United States, Wabco said.
Revenue gains also came from sales in South America, up 23.5% — 14.1% excluding foreign currency translation effects. Total sales in Asia increased 16.1% — 17.6% excluding foreign currency translation effects. Sales in China grew 42.1% — 49.2% excluding foreign currency translation effects. Sales in Korea increased 16.1% —15.5% excluding foreign currency translation effects, the company said.
Wabco’s aftermarket sales increased by 5.6% — 6.6% excluding foreign currency translation effects — in the quarter “from continuous growth in key regions, additionally supported by a one-time replacement of competitor products in the field, partially offset by a continued severe drop in the Middle East due to political and economic uncertainty.”
In the quarter, Wabco announced that Daimler Trucks extended its long-term supply agreement with the company for new heavy-duty automated manual transmission control technology to support its series production in Europe, North America, Japan and South America. Headquartered in Germany, Daimler Trucks is the world’s largest manufacturer of trucks more than 6 tons.
Also, Wabco said it continues to strengthen its fleet management systems business in India as the company has recently signed an agreement to acquire AssetTrackr, a startup fleet management systems provider.
Based in Bangalore, India, AssetTrackr is differentiated through advanced cloud-based fleet management systems technologies, “which superbly complement telematics products recently launched by Wabco India, Wabco said.
The company, based in Brussels, supplies commercial vehicles with advanced driver assistance, braking, stability control, suspension, transmission automation and aerodynamic components.
Stifel Financial Corp. analyst Michael Baudendistel discussed the failed takeover bid in a note to investors on July 20.
“Evidently, the company received a takeout offer, which made it through due diligence (and it sounds as if Wabco had agreed to the terms) but discussions were eventually terminated when the buying company’s board declined to grant final approval. Wabco’s management stated that it does not know why the transaction was not approved by the purchaser’s board,” Baudendistel said. “That is the extent of what we know about the terminated transaction. We have been asked several times today [July 20] who we think the acquirer was. The short answer is, we don’t know.”
He said his guess, however, would lead to another global supplier of truck and bus components that already sells to the world’s largest truck and bus manufacturers.
