Commercial vehicle supplier Wabco Holdings Inc. reported third-quarter net income and revenue rose on gains in North America and India.
Net income for the period ended Sept. 30 was $74.5 million, or $1.41 per share, an increase of 6.7% compared with $69.8 million, or $1.30, a year earlier.
Revenue rose 10.5% to $915 million compared with $828 million in 2017.
Global truck and bus production in the quarter declined by 8% year-over-year driven by a drop of 27% in China, partially offset by further market growth in the Americas and India.
In North America, quarterly production was up 9%, and Wabco’s revenue jumped 48%. Of that, 35% came through acquisition, plus sales gains from automated manual transmissions and air compressors as Class 8 orders continue on a historically strong trajectory, according to the Brussels-based company.
Wabco has expanded its presence in North America since 2016, tripling its workforce and acquiring leading technology businesses — Mico Inc., Laydon Composites and R.H. Sheppard Co. Inc. Wabco completed its buyout of Meritor Wabco Vehicle Control Systems, its joint venture with Meritor Inc., in late 2017.
At the same time, Wabco is building a “new kind of brand positioning around mobilizing vehicle intelligence, focusing on this ACE, which stands for autonomous, connected and electric,” Wabco Chairman and CEO Jacques Esculier said during an earnings conference call.
“We have put in place something that is incredibly powerful and unique, which is an amazing leadership in braking control systems, steering that we are connecting to the braking and stability control. And then we have this pillar around connectivity, fleet management solutions, telematics, and all this,” he said.
Its quarterly highlights included several agreements and products mentioned during the IAA Commercial Vehicles show in Hanover, Germany — covering air-disc brakes, trailer braking control systems, electrified drivetrains, sensors, collision mitigation systems and autonomous driving.
Meanwhile, the capacity of its suppliers is starting to “really build up and catch up,” which should reduce supply chain constraints, Esculier said.
“Wabco provides one of the first outlooks of the public commercial vehicle companies on its 2019 outlook, and we believe the outlook was better than expectations overall,” Stifel, Nicolaus & Co. investment analyst Michael Baudendistel wrote in a note to investors.
“We found the initial outlook for European production of minus 2% to plus 3% to have been encouraging given that truck production in Europe remains at a [historic] high level, while the outlook for North American of flat to plus 5% was consistent with the fairly bullish sentiment we heard at recent industry conferences. China remains a drag next year with an initial outlook for minus 15% to minus 10%,” Baudendistel wrote.
Wabco’s production outlook for India forecast growth of 5% to 15%.
During the quarter, it repurchased 740,490 shares for $90.2 million through its buyback program.
Wabco is a global supplier of braking control systems and other advanced technologies intended to improve the safety, efficiency and connectivity of commercial vehicles.