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Investing.com -- Knorr-Bremse shares gained 3% after the company reported first quarter orders that exceeded analyst expectations, despite mixed performance across its business segments.
The German braking systems manufacturer posted orders of €2,108 million, 1% ahead of consensus estimates of €2,089 million. The company’s Rail Vehicle Systems (RVS) division was the standout performer, with orders beating expectations by 7% and showing 8% organic growth, driven by strength in Europe and China.
However, the Commercial Vehicle Systems (CVS) division underperformed, with orders missing estimates by 7% and declining 9% organically, primarily due to significantly weaker North American demand.
Revenue for the quarter came in at €1,999 million, 1% below consensus estimates of €2,023 million. The RVS segment reported 4% organic growth in revenue, while CVS revenue declined 2% organically with North America showing significant weakness.
Operating EBIT reached €262 million, 2% ahead of consensus at €258 million, resulting in a group operating EBIT margin of 13.1%, approximately 35 basis points better than expected. The company’s RVS division achieved margins of 16.5%, while CVS margins were 10.3%.
Free cash flow was reported at €146 million, below consensus estimates of €169 million and down from €158 million in the same quarter last year. Working capital improved year-over-year excluding the Signalling business, decreasing from 70 to 68 days, while return on capital employed (ROCE) improved to 21%.
The company’s aftermarket business showed strong performance, increasing to 59% of RVS revenue and 32% of CVS revenue, helping to offset challenges in original equipment sales.
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