my 1st post here

Hello,
I 1st want to thank Saul and others who post here and educate us all. i happened on this board about 3 months ago and trying to read up all the posts. still a way to go.

I decided to do the 2 yrs worth of revenue and earnings and TTME on wabtec.

I got earnings results that were different from what I read on wabtec board by Saul.
I finally figured out the difference in earnings were due to the 2:1 split in May 2013 ( Just took 3 hrs)

I am struggling how to account for this going forward.
For example
mar2013 earnings 1.44
mar 2014 earnings 0.83

this is not an increase though in their report they say it is
“Wabtec Reports Record Quarterly Sales and Earnings; 1Q EPS of 83 Cents, Up 15 Percent.”
Do i have to double the earnings to 1.66.
do i do this going forward all the time?
thanks
Hope I am making sense with my question
usha
ps
saul, one of your criteria for a stock to select is a revenue growth of 25%. WAb does not have this. can you explain your reasoning?
thanks

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this is not an increase though in their report they say it is
“Wabtec Reports Record Quarterly Sales and Earnings; 1Q EPS of 83 Cents, Up 15 Percent.” Do i have to double the earnings to 1.66.

ushats,

Actually, what you want to do in this instance is essentially the opposite which is divide the pre-split earnings by 2. After a stock split, Wabtec’s management will calculate new earnings using post-split shares but they won’t go back and re-calculate old EPS to account for the split. So their earnings are as follows:

Mar 2013 = 1.44/2 = .72
Mar 2014 = .83

.83-.72 / .72 = 15.3%

Hope this helps.

Jason
Long WAB

2 Likes

saul, one of your criteria for a stock to select is a revenue growth of 25%. WAb does not have this. can you explain your reasoning?

Usha, I made an exception for WAB because they are such a reliable company. They have an extraordinary record, being the only company on any US exchange whose stock price has been up for each of the last 13 (or 14, I forget) years. That includes the “Great Recession” of 2008 as well as the 9/11 sell-off year. Seems like a very well run company. I just added some myself.

Saul

Thanks, that does help. I will continue to track and get a handle on this
usha