Railcar Giant Greenbrier Faces Setback In Q3 - Can New Railcar Orders Turn the Tide?

The Greenbrier Companies, Inc. GBX shares are tumbling today after the company reported worse-than-expected third-quarter FY24 results.

Revenue declined to $820.2 million from $1.038 billion a year ago and missed the consensus of $928.7 million.

The company’s lease fleet utilization was around 99%, and fleet size increased by 600 units to 15,200 units.

GBX has secured orders for 6,300 new railcars worth $830 million and delivered 5,400 units in the quarter. 

As of May end, the new railcar backlog stood at 29,400 units, with an estimated value of $3.7 billion.

EBITDA came in at $104 million vs $95 million a year ago, with a margin of 13%. EPS of $1.06 missed the consensus of $1.15.

As of May 31, cash and equivalents stood at $291.8 million. The company’s quarterly dividend per share of $0.30 is payable on August 13 to shareholders of record as of July 23.

FY24 Outlook: Greenbrier revised revenue guidance to $3.50 billion-$3.60 billion (vs. $3.50 billion-$3.70 billion earlier), compared to the consensus of $3.56 billion. 

The company now expects to deliver 23,500 – 24,000 (vs. 23,500 – 25,000 units earlier), including around 1,400 units in Brazil.

Greenbrier projects capital expenditures of around $150 million in Manufacturing and $15 million in Maintenance Services and sees gross leasing investment of about $340 million in Leasing & Management Services. 

The company anticipates proceeds from equipment sales of around $75 million.

Lorie L. Tekorius, CEO and President, said, “Consolidated gross margin in the mid-teens for a third consecutive quarter drove strong EPS performance. Results reflect our continued focus on efficiencies gained over the last several quarters and execution by the team that extends across the full reach of Greenbrier’s business.” 

Investors can gain exposure to the stock via First Trust RBA American Industrial Renaissance ETF AIRR and Invesco S&P Smallcap 600 Pure Value ETF RZV.

Also Read: Greenbrier Gears Up For Q3 Print; Here Are The Recent Forecast Changes From Wall Street’s Most Accurate Analysts

Price Action: GBX shares are down 11.3% at $43.07 at the last check Monday.

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