Greenbrier Railcar Orders Fall 70%

Greenbrier Cos. on Tuesday reported quarterly revenue and profit that missed analyst expectations amid a 70% drop in new railcar orders, as the downturn in the energy sector continued to drag on results.

The Lake Oswego, Ore., railcar maker company has been cutting costs in light of slowing orders, which have been hurt by weakness in the broader economy and by low energy prices. The railway industry as a whole has been struggling, as energy companies ship less crude oil, coal and loads of fracking sand used to drill oil and natural-gas wells.

For the fiscal second quarter ended Feb. 29, Greenbrier reported a profit of $44.9 million, or $1.41 a share, down from $50.4 million, or $1.57, a year earlier. Revenue increased 6.2% to $669.1 million.

Analysts polled by Thomson Reuters had forecast earnings of $1.56 a share on $730 million in revenue.

Greenbrier Chief Executive William Furman said the company is adapting to the economic climate, noting that 83% of its total backlog is non-energy related. The total value of its backlog fell 16% from a year earlier to $4 billion.

Greenbrier said it took in new orders of 3,000 railcars valued at $310 million during the quarter, down 70% from the year before. The company trimmed its delivery estimate for the year to 20,000 to 22,000 units, cutting 500 off the top end. It also narrowed its earnings guidance to $5.70 to $6.10 a share for the year from a previous forecast of $5.65 to $6.15 a share.

Also Tuesday, the company announced a joint venture with Sumitomo Corp. of Americas to establish an axle-machining facility on West Coast. The project, known as GBSummit, is expected to open in 2017.

Greenbrier has been expanding its geographic reach, recently entering into markets in the Middle East and South America.

Shares of Greenbrier, which have fallen 12% in the last three months, were inactive in premarket trading.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

April 05, 2016 07:45 ET (11:45 GMT)

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