Why Greenbrier Companies Stock Is Shooting Higher Today

Greenbrier Companies Inc GBX reported third-quarter FY23 sales growth of 30.8% year-on-year to $1.04 billion, beating the analyst consensus of $898.75 million.

Revenue by segments: Manufacturing $870.2 million (+33.6% Y/Y); Maintenance Services $122.9 million (+21.1% Y/Y); and Leasing & Management Services $45 million (+9.5% Y/Y).

Adjusted EPS of $1.02 beat the consensus of $0.58.

GBX recorded new railcar orders for 4,600 units valued at $650 million, and deliveries of 6,600 units.

The gross margin was 12.3%. the operating margin for the quarter was 4.9%, with an operating income of $50.7 million.

Adjusted EBITDA for the quarter was $96.9 million.

As of May 31, 2022, the new railcar backlog was 23,400 units with a value of $2.9 billion.

Greenbrier held $341.5 million in cash and equivalents as of May 31, 2023. Operating cash flow for the quarter totaled $1.2 million.

Dividend: The board increased quarterly dividend by 11% to $0.30 per share, payable on August 8, 2023 to shareholders of record as of July 18, 2023.

Buyback: The company repurchased 1.2 million shares of stock for $32 million, with $54 million remaining under the current share repurchase program.

"Our results demonstrated the early impact of operational initiatives described during our Investor Day in April," President and CEO Lorie Tekorius said.

"In particular, certain manufacturing efficiencies were achieved ahead of plan, and we expect further improvement.”

FY23 outlook: Greenbrier raised its FY23 revenue outlook to $3.8 billion – $3.90 billion from $3.4 billion - $3.7 billion versus the consensus of $3.68 billion.

Greenbrier expects deliveries of 25,000 – 26,000 units (prior view 23,000 – 25,000 units), including ~1,000 units in Greenbrier-Maxion (Brazil).

Price Action: GBX shares traded higher by 11.7% at $36.30 premarket on the last check Thursday.