LOS ANGELES FreightCar America Inc. returned to profitability in the second quarter amid higher deliveries and improved revenue, with the company looking for rising hopper car orders to bolster its declining dependence on coal cars.
The Chicago-based rail car builder posted net income of $1.6 million for the three months ended June 30, in contrast to a net loss of $3.4 million in the same period last year, on revenue that nearly tripled to $139.7 million from $47.1 million.
"Deliveries, revenue and net income were at their highest levels since the third quarter of 2012," president and chief executive officer Joseph E. McNeely said in a statement accompanying the companys earnings results, adding that FreightCar Americas manufacturing backlog is at its "highest quarter-end level since 2006."
The companys traditional specialty has been coal cars, a market sector that has suffered in recent years vs. strong demand for tank cars by the oil and petrochemical industries. FreightCar estimates the number of coal cars in storage fell 44.4 percent to 5,000 at the end of June from 9,000 at the end of March, senior vice president of marketing and sales Ted Baun said during an earnings conference call.
Rail car orders totaled 2,401 units in the second quarter, more than triple the 693 rail cars ordered in the year-ago quarter and up 45.2 percent from 1,654 units in the first quarter.
None of the units ordered in the second quarter were coal cars, but 1,455 were covered hoppers, where FreightCars orders and production capacity have been rising. There remains "broad interest" in these cars from the oil fracturing sand, cement, grain and chemical industries, Baun said, also noting growing interest in noncoal cars in general from such commodity markets as steel.
The companys manufacturing backlog as of June 30 totaled 8,493 units, which included more than 4,700 noncoal cars, up more than fourfold from its total backlog of 2,065 rail cars at the same time last year and up 9.9 percent from 7,727 cars at the end of March, Baun said.
As a whole, orders for the North American rail car industryconsidered a major consumer of steel platetotaled 33,912 units in the second quarter, more than double the 14,850 units ordered in the same period last year, with deliveries increasing 28.3 percent to 16,056 from 12,511 units, Baun noted.
Nontank cars as a percentage of total industry orders grew to 69 percent from 53 percent in the same comparison, with covered hopper cars accounting for 74 percent of these order in the latest quarter, he added.
"We expect this trend to continue," Baun said.
FreightCar also leases rail cars and is a provider of maintenance and repair services.