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WABCO Holdings Announces Its New Share Repurchase Program

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Dec. 6 2016, Published 2:46 p.m. ET

Price movement

WABCO Holdings (WBC) has a market cap of $5.9 billion. It rose 4.7% to close at $107.19 per share on December 5, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 11.0%, 10.7%, and 4.8%, respectively, on the same day.

WBC is trading 6.5% above its 20-day moving average, 3.4% above its 50-day moving average, and 4.0% above its 200-day moving average.

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Related ETF and peers

The Schwab US Mid-Cap ETF (SCHM) invests 0.21% of its holdings in WABCO. The YTD price movement of SCHM was 13.7% on December 5.

The market caps of WABCO’s competitors are as follows:

  • Cummins (CMI) — $24.0 billion
  • PACCAR (PCAR) — $22.9 billion

Latest news on WABCO

WABCO Holdings (WBC) announced the repurchase of its shares of up to $600 million of the company’s common stock from January 1, 2017, through December 31, 2018. Currently, the company can still repurchase shares of up to $63.3 million through December 31, 2016.

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Performance of Wabco in 3Q16

Wabco Holdings reported 3Q16 sales of $675.4 million, a rise of 4.9% compared to $643.6 million in 3Q15. The company’s gross profit margin and operating margin rose 590 basis points and 730 basis points, respectively, in 3Q16 compared to 3Q15.

Its net income and EPS (earnings per share) rose to $98.1 million and $1.76, respectively, in 3Q16 compared to $38.8 million and $0.67, respectively, in 3Q15. It reported EPS on a performance basis of $1.54 in 3Q16, a rise of 10.8% compared to 3Q15.

WBC’s cash and cash equivalents and inventories rose 37.8% and 22.8%, respectively, in 3Q16 compared to 4Q15.

Projections

Wabco Holdings (WBC) made the following projections for fiscal 2016:

  • sales of $2.80 billion–$2.83 billion
  • sales growth of 7.5%–8.5% in local currencies
  • operating margin of 13.5%–13.8% and diluted EPS of $5.75–$5.85 on a performance basis
  • operating margin of 12.3%–12.6% and diluted EPS of $4.21–$4.31 on a reported basis

This guidance includes non-cash tax expenses due to the European Commission’s decision in January 2016 against the Belgian tax authority.

In the next part, we’ll take a look at VF Corporation (VFC).

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