Knorr-Bremse stock posts strong Q3 as rail orders lag

Knorr-Bremse reported a strong third quarter on October 28, with higher profitability, revenue and free cash flow despite weaker Rail order intake. The company said in its corporate release that operating EBIT reached its second-highest quarterly level in company history. Knorr-Bremse stock traded at 93.10 euros on Lang & Schwarz at 11:33 CET on Wednesday, November 4, 0.38 percent above the Xetra close of Tuesday, November 3.

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Profitability strengthens across divisions

Third-quarter revenue rose 9.0 percent year on year to 2.051 billion euros. Operating EBIT increased 19.1 percent to 299 million euros, while the operating EBIT margin expanded to 14.6 percent from 13.3 percent. Free cash flow climbed nearly 50 percent to 238 million euros from 159 million euros in the prior-year quarter.

Group order intake rose 4.9 percent to 2.053 billion euros, and the order book grew 7.0 percent to 7.883 billion euros as of September 30. Earnings per share increased 22.5 percent to 1.09 euros. Chief Executive Marc Llistosella attributed the performance to the BOOST strategy and said the company was moving into its Growth Beyond initiative.

Rail remains the main execution test

The division picture was mixed. Rail order intake fell 10.9 percent to 1.045 billion euros from 1.173 billion euros a year earlier, although Rail revenue rose 6.1 percent to 1.114 billion euros and operating EBIT advanced 9.9 percent to 197 million euros. The Rail operating EBIT margin reached 17.7 percent, up from 17.0 percent.

Knorr-Bremse said project timing affected Rail orders and expects a partial recovery in the fourth quarter, with order intake again around 1.2 billion euros. The Rail order book still rose to 5.858 billion euros from 5.659 billion euros a year earlier, giving the division a sizeable base for future deliveries.

Truck provided the stronger order momentum. Order intake rose 30.1 percent to 1.018 billion euros, while revenue increased 12.5 percent to 938 million euros. Operating EBIT grew 31.9 percent to 116 million euros, lifting the margin to 12.3 percent from 10.5 percent.

Upper-end outlook remains intact

Management confirmed its 2026 operating outlook and expects revenue and free cash flow at the upper end of their respective ranges. The guidance calls for revenue of 8.1 billion to 8.3 billion euros, an operating EBIT margin of 14.0 percent to 14.5 percent and free cash flow of 750 million to 850 million euros.

The outlook assumes that the Middle East crisis does not escalate or persist in a way that disrupts supply chains. For investors, the next key signal is whether the expected Rail order recovery materializes while the Truck division sustains the momentum seen in North America and Europe.

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