The Greenbrier Companies announced March 22 that it had received orders for 3,800 new railcars with an aggregate value of nearly $450 million during its fiscal second quarter ended Feb. 28. At the same time, the company announced preliminary financial results for its fiscal second quarter.
The 3,800 railcars include tank cars, automobile-carrying railcars and covered hoppers, and are “consistent with Greenbrier’s expectations for the period. A new railcar backlog of 26,000 units valued at $2.7 billion continues to be diversified across railcar types.”
Greenbrier also announced preliminary financial results for its fiscal second quarter. It expects revenue of approximately $650 million and unadjusted EPS of $.07 to $.09 per share. Manufacturing problems in Romania and reduced building activity at the Gunderson plant, among other factors, impacted results by $0.29, excluding one-time charges of $0.14 related to loss contingencies on certain railcar contracts—primarily in Romania—along with facility closure costs in railcar repair operations.
“In the quarter, railcar order demand was solid overall,” Greenbrier Chairman and CEO William A. Furman said. “However, we are disappointed with our earnings. This was largely driven by three factors. First, poor manufacturing execution in Romania compounded by supplier delivery failures and railcar contract loss contingencies created losses in the quarter at our European railcar manufacturing operations. Next, lower overhead absorption due to increased labor costs and lower railcar build activity at our Gunderson manufacturing facility weakened results. Finally, continued [problems] in railcar repair operations, including extreme winter weather and closure costs, impacted earnings. Collectively, these items negatively impacted results by $0.29 per share. Greenbrier is actively addressing these performance issues and will resolve them.”
Furman added, “In Europe, effective Feb. 1, 2019, William Glenn rejoined Greenbrier as Chair of the Management Board and CEO of Greenbrier-Astra Rail with a mandate to improve operating profitability. A railcar production line re-opens at Gunderson in the fiscal third quarter, improving the overhead absorption and production volumes.”