ARI noted those earnings excluded $14.3 million of profit on railcars built for the lease fleet that is eliminated in consolidation and is based on an estimated fair market value of revenues as if the railcars had been sold to a third party, less the cost to manufacture. But the results, equaling 63 cents per share, handily beat Wall Street consensus estimates of 54 cents per share.
Second-quarter revenue was $154.2 million, up from $111.9 million during the second quarter of 2011. ARI credited its manufacturing segment for much of the revenue. ARI shipped approximately 2,200 railcars during the second quarter of 2012, including approximately 910 railcars to leasing customers, compared with approximately 1,040 railcars shipped during the second quarter of 2011.
Operating margin was 16.8% for the second quarter of 2012 compared with 7.3% a year ago. Earnings from operations increased due to strong shipments, improved sales mix and pricing, and operating leverage and efficiencies as a result of higher production volumes, ARI said.
"We are pleased with our strong financial performance, operating results and significant growth of our fleet of leased railcars," said James Cowan, President and CEO of ARI. "Our railcar production volumes were at high levels, which provided operational leverage and efficiencies that contributed to our outstanding results. In addition, our earnings have benefited from vertical integration projects that were implemented over the past several years. The market for certain railcar types remains very strong. During the quarter, we received orders for 2,810 railcars."
ARI's backlog as of June 30, 2012 was approximately 6,800 railcars, including approximately 1,620 railcars for lease customers.