Earnings from Wabtec and Sherwin-Williams

We had two earnings reports this morning, Wabtec and Sherwin-Williams. Express Scripts will report after the close (I incorrectly said ESRX reports on Wednesday in the last newsletter. My apologies.)

The earnings report from Sherwin-Williams (SHW) is a bit confusing, so I’ll try to clear it up. For Q3, the company earned $3.33 per share, but that figure includes $1.42 per share in acquisition costs. That means Sherwin made $4.75 per share from continuing operations. That beat Wall Street’s estimate of $4.67 per share. Sherwin’s EBITDA from continuing ops is up 9.6% this year to $1.70 billion.

Sherwin previously said to expect adjusted earnings between $4.80 and $5.20 per share. The company estimates that the hurricanes dinged sales by $50 million and EPS by 27 cents per share. Considering all that, this was a decent quarter.

Now for guidance. SHW sees Q4 ranging between $1.97 and $2.27 per share. Adding back 98 cents in acquisition costs, that comes to $2.95 to $3.25 per share.

For all of 2017, Sherwin expects earnings between $11.20 and $11.50 per share. Adding in costs, the range is $14.85 to $15.15 per share. That’s an increase of five cents per share at both ends from their previous guidance.

The shares are up about 0.30% this morning.

For Q3, Wabtec (WAB) earned 88 cents per share. That beat Wall Street’s estimate of 84 cents per share. Some stats:

Cash from operations was $40 million for the third quarter. For the first nine months of 2017, cash from operations decreased compared to the same period of 2016 mainly due to an increase in working capital.

At Sept. 30, the company had cash of $228 million and debt of $1.9 billion. Total debt was 6 percent lower than at the end of the second quarter.

Wabtec’s multi-year backlog rose 2% to a record $4.5 billion. Their 12-month backlog is up 5% to $2.2 billion, also a record.

Wabtec now expects full-year revenue of $3.8 billion, and EPS between $3.45 and $3.50 per share. That’s a reduction from their previous guidance of $3.55 to $3.70 per share, but I believe the newer figure includes a charge of 18 cents per share.

The stock is currently up about 4.7% today.

Posted by on October 24th, 2017 at 11:22 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.