Greenbrier Lands $580MM in New Railcar OrdersWritten by Marybeth Luczak, Executive Editor
The Greenbrier Companies on March 22 reported receiving orders for 4,500 new railcars during the fiscal second quarter ended Feb. 28, 2023, for which it provided preliminary results, including deliveries of 7,200 units. TD Cowen offers insight.
At an aggregate value of $580 million, the orders for tank cars, autoracks, boxcars and covered hoppers “were consistent with Greenbrier’s expectations for the period,” according to the manufacturer. It noted that certain orders “are subject to customary documentation and completion of terms.”
Greenbrier also reported that it expects revenue of approximately $1.1 billion, deliveries of 7,200 units, and GAAP EPS of $0.95 to $1.00 per share during its fiscal second quarter. Full results are slated to be released April 10.
“Our order activity and financial performance in the second quarter demonstrate Greenbrier’s market-leading position in freight railcar sales, leasing and services,” Greenbrier CEO and President Lorie L. Tekorius said. “This reflects great execution by our commercial and leasing teams, excellence in engineering, agility in manufacturing, and resourcefulness in global sourcing. Fundamentally, Greenbrier is well-positioned and moving ahead in our markets.”
TD Cowen Insight
“Deliveries of 7,200 units are well above our projection of 5,400 railcars,” TD Cowen Transportation OEM Analyst Matt Elkott reported March 22. “Revenue is expected to be $1.1 billion, exceeding our and consensus estimates of $797 million and $794 million, respectively. The company attributed the preliminary results to strong execution. We believe they could also signal improvement in the supply chain.”
“The pre-announcement affirms our favorable view on Greenbrier, which is one of our top picks,” Elkott said. “Orders were 4,500 units in the quarter. The company noted that was in line with its expectations. It does, however, represent a sequential decline from 5,600 units in fiscal first-quarter 2023 and is below our estimate of 7,900 units. That said, orders can be lumpy.
“GAAP EPS is expected to be $0.95 to $1.00. The GAAP consensus estimate is $0.41, but it’s unclear if it is comparable to the company’s range. Non-GAAP consensus is $0.36, and ours is $0.34.
“Greenbrier expects to announce fiscal second-quarter 2023 earnings on April 10. The company noted that, in place of a conference call, it will provide additional information regarding its recent financial performance and strategic plans at its previously announced Investor Day on April 12. We note that this will be the company’s first formal investor day and likely the first time Greenbrier provides somewhat specific multi-year targets.
“The shares should outperform today and could be a mild boon to competitor Trinity ($23.83, Outperform) shares. See our March 8 industry note ‘Push For Modal Share Pursuit Most Palpable In Years.’”