Friday, July 19, 2013

Analyst: Tank cars still driving orders in 2Q

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Figures released Friday, July 19, 2013, by the Railway Supply Institute's American Railcar Institute Committee (ARCI) show that tank cars continued to be a driving force in railcar orders during the second quarter, according to KeyBanc Capital Markets Inc. analyst Steve Barger.

ARCI figures show industry-wide orders for the quarter totaled 14,850, down from 23,901 in the first quarter and also down 9.6% from 16,434 in the second quarter of 2012. RSI said 12,511 cars were delivered in the second quarter, up 4.8% from first-quarter deliveries of 11,952. The backlog as of July 1 was 73,706, up about 2.8% from 71,704 on April 1 (end of the first quarter).

"Overall, the industry order number remains highly concentrated in tank car orders, which accounted for 6,944, or 47% (down from 19,267, or 81% during 1Q13) of the total orders in the quarter," said Barger in a note to clients Friday. "Covered hoppers orders, which were the second largest concentration in orders, came in 4,795, or 32% of the total orders. Together, these two car types accounted for 79% of the total orders in the quarter vs. 89% for the top two last quarter.

"Specific to tank cars, the industry orders of 6,944 are a step down from the record 19,267 last quarter and below 1Q11-1Q13 average of approximately 9,800. For context, tank cars account for roughly 20% of the industry-wide fleet of railcars, while non-tank cars account for 80%," Barger said.