Thursday, April 09, 2009

Greenbrier reports 2Q loss, suspends its quarterly dividend

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Lake Oswego, Ore.-based railway equipment supplier Greenbrier Cos. Inc. reported a net loss for its second quarter, ended Feb. 28 ,of $6.9 million, or 41 cents a share, compared with earnings of $1.4 million, or 9 cents a share, in the comparable period a year ago. Analysts had expected a loss of 7 cents a share. As a result, the company has suspended its quarterly dividend.

In a statement, Greenbrier said its performance was affected by a deferral of revenue and related margin on a portion of the sale price of certain railcars sold and paid for in full during the period.

Greenbrier’s revenue grew 11% to $287 million during the quarter, helped by increased sales at its manufacturing and refurbishment andparts segments. But its new railcar manufacturing backlog fell 5% to 15,100 units as of Feb 28. Additionally, General Electric Railcar Services Corp., which is scheduled to receive about 79% of the total railcar backlog, has informed Greenbrier that it may substantially reduce, delay, or otherwise cancel deliveries under the contract.

"Greenbrier believes its contract with GE contains adequate protection in the event of an attempted cancellation or renegotiation of railcar deliveries," the company said.

Company CEO William Furman said he did not expect the current economic downturn to reverse in the near future. "Year-to-daterail loadings in North America are down 16.3 %, and it is estimated that about 20%-to-25% of North American railcar fleet is currently idle, as manufacturers worldwide drastically reduce or halt production," he said.