Westinghouse Air Brake Technologies (WAB) Q3 2026 earnings summary

Executive summary

• Q3 sales rose 8.1% YoY to $3.12B; GAAP diluted EPS increased 33.7% to $2.42 and adjusted diluted EPS rose 22.0% to $2.83.

• Freight and Transit growth and margin expansion supported results; total backlog reached a record $31.435B at September 30, up 22.9% YoY.

Financial highlights

• Q3 operating income was $625M versus $491M; net income attributable to shareholders was $409M versus $310M.

• Q3 sales growth included $137M organic growth and $114M from acquisitions, partly offset by $5M unfavorable FX and $12M from portfolio exits.

• Nine-month sales rose 12.8% to $9.249B; operating income was $1.742B versus $1.437B, and adjusted diluted EPS was $8.29.

• Q3 operating cash flow was $455M, with 82% cash conversion; nine-month operating cash flow was $1.095B versus $767M.

Outlook and guidance

• FY 2026 revenue guidance remains $12.30B–$12.60B; adjusted diluted EPS guidance increased to $10.85–$11.05 from $10.60–$10.90.

• Guidance assumes tariffs in effect as of Oct. 21, 2026, excludes IEEPA tariff refunds in Q4, and anticipates a ~24.5% tax rate and capex at 2% of sales.

• Five-year targets through 2029 include mid-single-digit organic sales CAGR, 350+ bps adjusted operating margin expansion, double-digit adjusted EPS CAGR, and >90% cash-from-operations conversion.

• Q4 margin expansion is expected to exceed Q3, with a lower YoY tariff headwind; FY 2026 organic growth is expected to exceed 5%.

• North American railcar builds are forecast at ~23,000 in 2026; 2027 industry forecasts point toward 2025 levels, still below replacement ratio.