Locomotive builder Wabtec’s revenue and profits increased in the fourth quarter, but the company’s stock tumbled 11% Wednesday after quarterly results and a new five-year outlook both came in below Wall Street expectations.

The drop in Wabtec’s stock price (NYSE: WAB) was the largest in the S&P 500.

Quarterly operating income increased 8.4%, to $334 million, as revenue grew 2.3%, to $2.58 billion. Earnings per share increased 2.5%, to $1.23.

The Pittsburgh-based company’s order backlog was $7.68 billion, an increase of 2.6% compared to a year ago.

“The Wabtec team delivered a strong 2024 as evidenced by higher orders, sales, margin expansion, increased earnings and robust cash flow,” Chief Executive Rafael Santana said in a statement.

“I am encouraged by the underlying momentum of our business, and the team’s unrelenting focus on execution and delivering for our customers. And just as importantly, we continue to lay a solid foundation for us to build upon. Looking ahead, I believe Wabtec is well positioned to drive top quartile returns over time,” he added.

Wabtec is in discussions with Class I railroads regarding orders for new locomotives as well as additional modernization programs for older units, executives said.

In the fourth quarter, Wabtec won $1 billion worth of orders for new locomotives and modernizations. The North American modernization orders include $165 million from Ferromex of Mexico and $190 million split between two unnamed Class I railroads.

In addition, Wabtec has taken orders worth $74 million for upgrading Trip Optimizer and Locotrol on locomotives in North America.

Internationally, Wabtec recently received new locomotive orders worth $401 million from six customers, as well as a $248 million order for the Simandou mining project in West Africa.

Most of Wabtec’s fourth-quarter growth, however, came from its Transit segment. Transit revenue was up 7.1% for the quarter thanks to original equipment and aftermarket sales.

The company’s five-year outlook includes mid-single-digit growth in sales, a 3.5-point improvement in profit margin, and double-digit growth in earnings per share. The profit margin expansion is expected to come primarily from cost improvements and the pruning of lower-margin product lines.

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