Greenbrier's 1Q Net Income More Than Doubles to $69.4 Million
Greenbrier Cos.’ fiscal first-quarter net income more than doubled to $69.4 million, or $2.15 per share, as deliveries of intermodal and other rail equipment rose to 6,900 units during the period ended Nov. 30.
The company, based in Lake Oswego, Oregon, also raised revenue by more than 60% to $802.4 million.
However, the company noted that future railcar deliveries could be lowered as its backlog was reduced to $4.14 billion from $4.71 billion in the final quarter of fiscal 2015 ended Aug 31. Deliveries in the final 2015 quarter were 6,200.
CEO William Furman said in a statement that the quarter was the fourth consecutive period when earnings reached record levels in the wake of increased orders for tank cars to comply with new federal safety regulations and other equipment to support the energy and truck-rail markets.
“We anticipate and are prepared for market conditions in which order and backlog levels will likely come down from their elevated energy-driven peak,” he said. “We see positive continuing demand for a range of non-energy related railcars including automotive carrying railcars, large cube covered hoppers, non-energy tank cars and boxcars.”
A report from Stifel Nicolaus analyst Mike Baudendistel said challenges awaited Greenbrier, citing a 6% fourth-quarter decline in freight rail traffic, improved productivity and rail service that reduce equipment needs, low energy prices and the resulting drop in railcar production.
“Near-term orders may continue to disappoint and could make it difficult for the company to continue to maintain its backlog [which admittedly should keep earnings at historically high levels in fiscal 2016 and 2017],” he said, though long-term prospects were favorable as long as the company maintains its productivity in manufacturing.
