LOS ANGELES A
jump of nearly 50 percent in American Railcar Industries
Inc.s (ARIs) third-quarter earnings highlights the
contrast between a robust market for tank rail cars and
comparatively soft demand for new coal cars.
In contrast to
FreightCar America Inc., whose reliance on coal cars helped
lead to a loss for the Chicago-based rail car manufacturer
(see related story, left), "continued strong tank rail
car shipments along with a slight increase in hopper rail car
shipments" helped boost ARIs third-quarter net income
49.7 percent, according to Jeff Hollister, president and
interim chief executive officer of the St. Charles, Mo.-based
rail car builder.
and chemical demandalong with a shortfall in pipeline
capacityhas pushed up demand for tank cars, which are
estimated to account for about 80 percent of new rail car
bookings as well as backlogs (amm.com, Sept.
Moreover, delays in some major new pipeline programs have
resulted in demand for "thousands and thousands" of rail
cars--and the steel plate to manufacture them--to transport
petroleum products, a plate marketing executive for
Chicago-based steelmaker ArcfelorMittal USA told the
ASsociation of STeel Distributors earlier this year (
amm.com, March 25).
Hollister also said that in October ARI received a "multi-year"
order to supply 2,750 plastic pellet covered hopper rail cars
from Chevron Phillips Chemical Co., The Woodlands, Texas, for
delivery from 2014 through 2016. He didnt give a value
for the order.
ARI shipped about
1,640 cars in the third quarter, compared with 1,460 cars in
the same period in 2012. Rail cars for the companys lease
fleet represented 17 percent of total third-quarter shipments
compared with 21 percent of shipments a year earlier.
ARIs backlog at
the end of the third quarter was approximately 6,300 rail cars
with an estimated market value of $814.5 million, including
about 2,430 cars for lease with a value of some $331.5 million.
This backlog is down from 7,630 cars at the same point a year
earlier and 6,940 units in the second quarter.
manufacturing segment had third-quarter operating earnings of
$41.7 million on revenues of $205.8 million vs. operating
income of $34.2 million on revenues of $185.4 million in the
same period last year.
previously headed up ARIs manufacturing group, took his
present posts last month after the unexpected resignation of
James Cowan. ARI is controlled by billionaire investor Carl C.
Icahn, who has disclosed his intention of restructuring the
company in order to expand his holdings in the rail car
amm.com Oct. 14).