American Railcar Industries Net Slips

American Railcar Industries saw fourth-quarter revenue rise 25 percent to $203 million from a year earlier, as production was boosted by an Alabama factory expansion, but net income fell 3.7 percent to $7.6 million.

ARI said it ended the quarter with a railcar orders backlog of 4,243 railcars at Dec. 31, down from 5,956 railcars Sept. 30.

“We attribute the reduction in order activity to market uncertainty, driven primarily by a weak economy and a difficult credit environment. In response to this lower demand, we have slowed our production rates,” the company said.

Other railcar makers report plunging orders, and some are in talks with large customers to rework existing contracts for multi-year deliveries. The car suppliers also face a tough period this year and in 2010 as forecasts project a much worse market than 2008.

The producer’s shipments of finished cars out to buyers increased from a year earlier to 1,870 from the year-earlier 1,590 deliveries, and top-line sales benefited from higher prices as steel and other costs escalated in the year.

ARI also continues with “good efficiencies and controlled overhead spending,” said James J. Unger, President and CEO. However, “offsetting the increased volume and operating efficiencies were decreased margins in 2008 compared to 2007 for some of our railcars, due to competitive market conditions.”

Contact John D. Boyd at jboyd@joc.com.

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