Thursday, July 25, 2013

American Railcar Industries logs strong 2Q

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American Railcar Industries, Inc. (ARI) reported second-quarter earnings of $23.6 million, or $1.11 per share, late Wednesday, July 24, 2013, following the close of trading on the New York Stock Exchange, surpassing Wall Street consensus estimates of 82 cents per share. ARI earned 63 cents per share in the second quarter of 2012.

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.