LOS ANGELES Greenbrier Cos. Inc. continues to see an "early-stage recovery" in the freight transportation sector despite headwinds in some key market segments.
Greenbrier, a Lake Oswego, Ore.-based rail car manufacturer and leaser and wheel refurbisher, reported net income of $17.7 million in its fiscal second quarter ended Feb. 29 vs. a loss of $550,000 in the corresponding period last year. Revenue totaled $458.2 million, compared with $284.3 million in the year-ago period.
Greenbrier received orders for 3,600 new rail cars in its fiscal second quarter, up from 1,600 in the previous quarter. After the quarter ended, it received orders for an additional 2,300 units valued at $270 million, according to the company.
But while orders were on the rise, Mark Rittenbaum, executive vice president and chief financial officer, said in a conference call that rail car production will fall off in the fiscal fourth quarter ending Aug. 31 from the third quarter due to "line changeovers," as well as the companys production of new types of auto-carrying cars that require "more labor" than other cars.
Moreover, the Association of American Railroads has reported that the number of rail cars in storage on April 1 increased by 9,819 from a month earlier to make up 19.6 percent of the North American fleet. Asked about this change by a securities analyst, president and chief executive officer William A. Furman attributed it almost entirely to a declining need for coal cars, a major component of the rail car market. He also noted a decline in demand for fracking sand cars due to low natural gas prices.
But he emphasized that the companys incoming orders have shown an increasing diversity, particularly in energy-related sectors and gondolas for transporting steel, as well as for auto carriers, a market he described as "really hot."
Greenbrier will deliver more than 15,000 rail cars in the year ending Aug. 31, compared with 9,400 units the previous year and just 2,500 units during the year ended Aug. 31, 2010, when the company was hit by cancellations due to the economic recession.