Greenbrier Profit Rises 26 percent to $7.7 Million

Railcar and barge builder Greenbrier Companies earned a $7.7 million net profit in its fiscal fourth quarter that ended Aug. 31, up 26 percent from a year earlier, and expects major gains for the railcar segment while barge business slips.

Revenue fell 21 percent to $181.4 million as Greenbrier delivered 700 new railcars in the June-August period compared with 900 in the 2009 quarter.

For its entire 2010 fiscal year, the company had net income of $4.3 million after a 2009 loss of $56.4 million. It had $99 million in cash and cash equivalents on hand at the end of August, up from $76 million a year earlier.

By The Numbers: Freight Cars in Storage.

Greenbrier also generated more revenue in 2010 from its railcar wheel services, parts and repair operations than from equipment manufacturing. The parts and services business took in $390 million for the year, compared with $296 million from new equipment builds. A year earlier the two were almost even, and in 2008 Greenbrier’s manufacturing lines had substantially higher receipts than parts and service.

That looks to change soon. President and CEO William A. Furman said “the outlook for our new railcar manufacturing operations in North America continues to improve significantly. We now have five production lines dedicated to new railcar manufacturing, compared to two lines less than six months ago.”

Powering that is a rising backlog in orders to build new railcars. It reached 5,300 units as of Aug. 31 valued at $420 million, up from 4,400 units worth $370 million just three months earlier. And since September, Greenbrier got another 3,200 orders for car construction valued at $200 million.

However, “in the very near term, we anticipate that reduced demand for wheel services and marine vessels will limit earnings growth,” Furman said. Greenbrier shrank its barge output backlog by about $60 million in the latest quarter, given lower prospects for selling them. That left it with barge orders totaling $10 million at the end of the period.

For the September-November period, Greenbrier expects to post a net loss, it will just about break even in its fiscal 2011 second quarter. It looks for the railcar demand to keep improving in the coming year but with the weaker wheel services and marine business dampening its overall performance.

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