Ben Moore's questions to WESTINGHOUSE AIR BRAKE TECHNOLOGIES (WAB) leadership • Q3 2025
Question
Ben Moore asked for more color on pricing trends within the strong gross margin performance, especially in the context of sharing tariffs with customers. He also questioned the implied Q4 EPS being below consensus despite a raised EPS guide and held revenue guide, asking if it was due to below-the-line items. Finally, he inquired about the potential impact of proposed mergers like UPNS, drawing parallels to the CPKC merger's effect on locomotive activity and volume.
Answer
CFO John Olin confirmed that pricing is one of the four levers being used to address costs, with a marginal amount included in Q3 revenue, but noted there's still work to be done. He declined to comment on consensus but stated confidence in a strong Q4, with an implied midpoint of 11.25% revenue growth and approximately 24% EPS growth. President and CEO Rafael Santana refrained from commenting on specific mergers but viewed such consolidations as significant opportunities for increased car loads and rail volumes over time. He reiterated that fleet renewal is not discretionary, driven by the age of fleets and the high cost of maintaining older units, which ultimately triggers modernization or new acquisitions.