Top Performer for Wed: WABCO Holdings (WBC) - Zacks #1 Rank Top Performers

If you needed any evidence that the commercial vehicle market is in recovery mode, then you'd need to look no further than the Zacks #1 Rank List. There are currently 6 names from the auto/truck - orig industry in that group; that's 6 Zacks #1 Rank ('strong buy') companies with rising earnings estimates.

In fact, if you want to look even closer at that industry, you will see that there are also 8 Zacks #2 Rank ('buy') companies and only 1 with a Zacks 4 Rank ('sell').

WABCO Holdings Inc. (WBC), a leading supplier of safety and control systems for commercial vehicles, is the most recent member of the industry to underscore its generally positive performance. Not only did the company beat first-quarter earnings expectations, but it also enhanced its full-year outlook.

As a result, the company is one of the top-performing Zacks #1 Rank companies today with shares that have gained approximately 6.6%. Volume has soared to more than 1.7 million shares from the daily average of around 428,000.

This is the second time that we're visiting this space in the past week. On Apr 29, BorgWarner (BWA) was highlighted as a Top Performer. Besides WBC and BWA, the other 4 names from this space on today's Zacks #1 Rank List are American Axle & Manufacturing Holdings, Inc. (AXL), Autoliv, Inc. (ALV), Strattec Security Corp. (STRT) and Tenneco Inc. (TEN).

First-Quarter Report

Today, WABCO announced earnings per share of 51 cents for its first quarter, reversing a year-ago loss of 8 cents. The result also soared past the Zacks Consensus Estimate of 25 cents. This was the company's third straight quarter with a positive earnings surprise.

Sales jumped 47% to $491.1 million from last year's $333.9 million. Much of its sales improvement can be attributed to growth at original equipment manufacturers in Asia and South America (specifically China, India and Brazil). The rest of the growth stems from its global aftermarket business and sales to original equipment manufacturers in Europe and North America.

However, the best evidence of a recovery comes from WABCO's decision to raise earnings per share for 2010 to between $1.40 and $1.80, which is up 40 cents from the previous guidance. Furthermore, sales are now targeted to advance 23% to 28%, instead of 15% to 20%.

Earnings Estimates for WABCO

While there are no sure things when it comes to the market, there is a decent chance that WABCO's earnings estimates will head higher in the coming days. They had already been advancing, and now the company has issued an outlook for 2010 that's above the Zacks Consensus Estimate.

For this year, analysts currently expect $1.32 per share, which is up 3.1% in the past 30 days. The company has enjoyed 2 upward revisions out of 6 total estimates in that time. Over the past 2 months, the improvement is near 5%.

The Zacks Consensus Estimate for 2011 is $2.31 per share, or 75% better than the guidance for this year. The same amount of upward revisions has pushed this outlook higher by 4.5% in 30 days.

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