Greenbrier Reports Lower 1Q Net Income, Higher Revenue as Orders Soar Nearly 70%
The Greenbrier Cos. reported lower net income and higher revenue for its fiscal 2019 first quarter amid strong orders for double-stack intermodal units, tank cars and heavy-duty flat cars.
GBX is an international supplier of equipment and services to the freight rail transportation markets.
Net earnings for the period ended Nov. 30 were $18 million, or 54 cents per diluted share, on revenue of $604.5 million. That compares with net earnings of $26.3 million, or 83 cents, on revenue of $559.5 million a year earlier.
“During the quarter, we delivered nearly 4,500 railcar units and received total orders for approximately 5,400. This is up about 70% from our order total of 3,200 units for the first quarter last year, which highlights our momentum and provides a basis for confidence about fiscal 2019,” GBX Chairman and CEO William Furman said during an earnings call Jan. 9.
“In the chemical area, in plastics, downstream activities, there’s been tremendous investment in capacity in North America due to many factors. The fracking and the development of our own energy dependence has been part of that,” he added.
And, FAST Act [Fixing America’s Surface Transportation Act of 2015] deadlines are coming up in April 2020 to take out of crude service unjacketed CPC 1232 railcars.
Greenbrier has reported financial results for its first fiscal quarter ended Nov 30, 2018. View the highlights: https://t.co/A57GR1yo8D — Greenbrier Companies (@gbrxcompanies) January 9, 2019
The company reported 20% of its new railcar orders in the first quarter were received from markets outside of North America.
Greenbrier’s fiscal 2019 production plan is now 90% booked with firm orders, Furman said.
The North American rail industry continues to see positive leading indicators for demand. Total U.S. railcar traffic including intermodal approached 26 million carloads for the first 50 weeks of 2018, up 3.6% from 2017 levels, according to the Association of American Railroads. Intermodal volumes set an annual record in 2018, and other strong rail-loaded commodities in 2018 included petroleum products and chemicals.
Meanwhile, the “U.S. economy is very good. Fiscal policy is expansionary, and economic fundamentals are strong,” Furman added. “[But] stock markets have become abnormally volatile after an extended period of calm. Our stock has not been an exception to this.
“We are quite conscious of shareholder value. We believe the contributing factors include the partial federal government shutdown, potentially worsening trade conflicts and other forces.”
GBX’s stock price closed Jan. 11 at $39.54, down from $64.40 on Oct. 9.
The company’s fiscal 2019 guidance continues to be for deliveries of approximately 24,000 to 26,000 units, which includes about 2,000 units from Greenbrier Maxion in Brazil. Revenue will exceed $3 billion, and diluted earnings per share will be $4.20 to $4.40.
“We continue to see about two-thirds of Greenbrier’s deliveries and about 80% of our earnings in the second half of 2019,” Chief Operating Officer Lorie Tekorius said.
