John D. Boyd | Jan 07, 2011 10:35AM EST
Railcar and barge manufacturer Greenbrier Companies lost $2.3 million in its fiscal first quarter ending Nov. 30, but that was improved from a $3.2 million net loss a year earlier and comes amid a strengthening market for freight rail equipment.
The results "are in line with previously disclosed expectations," President and CEO William A. Furman said. "We continue to benefit from a recovery in the demand for new railcars."
Greenbrier has taken orders since August - when its 2010 fiscal year ended -- to build 6,000 new cars worth $400 million, Furman said, "demonstrating our ability to capture business as the new cycle begins" after several tough years for the rail equipment supply industry.
Railroads, leasing firms and shippers mothballed more than 500,000 railcars of all types across North America by mid-2009 before freight traffic began to draw down that idled fleet, but the overhang of unused cars blocked owners from ordering new ones until recently.
Furman said the new demand comes as major North American railroads saw general freight loadings rise 9.4 percent in 2010, while intermodal traffic surged 14.7 percent from 2009. New orders have come in for intermodal well cars to carry 53-foot domestic containers and for some high-demand freight cars such as covered hoppers.
Starting this month, he said, Greenbrier will increase production rates. In June, the company plans to open another railcar production line. Its railcar backlog as of Nov. 30 was for 8,100 units valued at $580 million, and its order book has grown since then by 1,900 more. The company also received a new barge order since the quarter ended, valued at $5 million, on top of a Nov. 30 backlog worth $10 million.
In its September-November period, the firm increased revenue 17 percent to $201 million from a year earlier, mainly through a 42 percent jump to $85 million in manufacturing operations dominated by railcar construction. Its wheel services, refurbishment and parts operation grew 4 percent to $97 million, while leasing and services revenue grew 1 percent to $18.9 million.
The company actually boosted its direct profit margin on those operations to $26 million from under $22 million, but other costs from sales, administration and foreign exchange topped $28 million.
Greenbrier ended the November quarter with $49 million in cash, down from $99 million a year earlier, but it added another $63 million after the period by selling 3 million shares of stock. It looks for revenue and basic earnings to rise in the year ahead, with most gains coming in the last half of its fiscal year.
-- Contact John D. Boyd at jboyd@joc.com.
