Westinghouse Air Brake Technologies Corporation ( WAB ) shares are trading lower after the company reported second-quarter FY24 results.

Sales growth of 9.8% Y/Y to $2.644 billion, marginally beating the consensus of $2.643 billion.

Sales growth was driven by higher sales in Freight (+13.1% Y/Y) and Transit (+2.0% Y/Y) segments.

The adjusted gross margin expanded 290 basis points to 33.3%, and the adjusted operating margin was 19.3%, up 290 basis points. 

At the end of the quarter, the total backlog stood at $22.08 billion, down 1.6% Y/Y. Adjusted EPS of $1.96 (+39.0% Y/Y) topped the consensus of $1.88.

During the quarter, the company returned $235 million to shareholders via share repurchases and dividends. 

Operating cash flow was $235 million versus $115 million a year ago. Wabtec held cash, cash equivalents and restricted cash of $595 million and total debt of $4.00 billion at the end of the quarter. 

Rafael Santana, Wabtec’s President and CEO said, “Demand on our end markets continues to be strong and we have significant opportunities for further growth given the quality of our products and the productivity and reliability that we provide for our customers.”

FY24 Guidance: Wabtec raised the adjusted EPS outlook to $7.20 to $7.50 (from $7-$7.40 earlier) versus the consensus of $7.39.

The company reiterated sales of $10.25 billion-$10.55 billion versus a consensus of $10.375 billion.

Dividend: On July 18, the Board of Directors declared a regular quarterly dividend per share of $0.20, payable on August 28, 2024, to holders of record as of August 14, 2024.

Investors can gain exposure to the stock via Janus Henderson U.S. Sustainable Equity ETF ( SSPX ) and IShares Environmental Infrastructure And Industrials ETF .

Price Action: WAB shares are down 4.46% at $160.61 at the last check Wednesday.