UPDATE 2-Wabtec cuts '09 view on weak freight market, shrs fall

* Q2 EPS $0.55 vs est $0.62

* Rev down 14 pct

* Shares fall 11 pct (Adds analyst comment, updates share movement)

By Bhaswati Mukhopadhyay

BANGALORE, July 24 (Reuters) - U.S. railcar parts maker Wabtec Corp (WAB.N) reported lower-than-expected quarterly results, hurt by weak freight market conditions, and cut its 2009 outlook, sending its shares down 11 percent.

Wabtec, which makes braking equipment and other parts for freight cars and passenger railcars, said it expects 2009 earnings of $2.35 to $2.55 per share, down from its prior view of $2.45 to $2.75 per share.

It expects 2009 revenue to be about 10 percent lower than its 2008 revenue of $1.58 billion. Earlier, it had expected revenue to be slightly down.

"We expected a trimming of guidance, but did not think it (the outlook cut) would necessarily be of this magnitude," analyst Paul Bodnar of Longbow Research said.

Bodnar, who has a "neutral" rating on the stock, said performance at the company's freight business was going to be lower-than-expected in the second half of 2009.

"In freight, it looks like we are kind of near or at the bottom in terms of the run rate there, but we do not know at this point how long that can last," he added.

Sales at Wabtec's freight group segment -- which makes freight cars, locomotives and train coupler equipment -- fell 32 percent in the second quarter to $136.1 million, hit by sharply lower rail traffic levels.

"I think freight is going to get worse before it gets better," analyst Arthur Hatfield of Morgan, Keegan & Co said.

Freight traffic across North America slumped about 21 percent in the week ended June 6 from the same week a year ago, including a 20 percent drop in U.S. rail freight, according to the Association of American Railroads.

For the second quarter, Wabtec reported net income of $30.8 million, or 64 cents a share, compared with $33.8 million, or 69 cents a share, a year ago.

According to Reuters Estimates, the company earned 55 cents a share, before special items, missing analysts' average expectation of 62 cents a share.

Revenue for the company, which has been downsizing and consolidating, fell 14 percent to $334.0 million. Analysts were expecting $380.0 million.

Sales at the transit group segment rose 4 percent to $197.9 million, driven by sales of components for subway cars. The transit group's products include braking, coupling, monitoring systems and commuter rail locomotives.

The company said federal funding and passenger ridership will drive growth at its transit segment.

However, Morgan Keegan's Hatfield, who expects to see some stability in the transit business, said the stimulus package may have minimal impact on the company.

Shares of the Wilmerding, Pennsylvania-based company were down $1.90 at $33.90 in afternoon trade on the New York Stock Exchange. They had earlier touched a low of $31.78. (Editing by Aradhana Aravindan)