Revenue was $159.4 million, lower than consensus estimates of $168.3 million for the quarter.
"The obvious implication of the substantial bottom line beat vs. the top-line miss is strong margin performance, and ARII did not disappoint, posting record consolidated gross and operating margins of 27.3% and 25.0%, respectively," said KeyBanc Capital Markets Inc. analyst Steve Barger in a note to clients Wednesday.
ARI took orders for 1,850 railcars during the quarter, "while we estimate it delivered 1,310, suggesting a unit book-to-bill of 1.4x," Barger noted. ARI's backlog for the quarter was 6,940 railcars.
Not surprisingly, demand for tank cars was a significant factor. "Given our view that most of the backlog is tank cars, we estimate ARII likely has about five quarters of production visibility," Barger said.