Greenbrier Reports Record EPS Amid Strong Railcar Orders

Greenbrier, a leading international supplier of equipment and services to global freight transportation markets, has reported its financial results for the third fiscal quarter ended May 31, 2024. The company's diluted earnings per share (EPS) of $1.06 grew to its highest level in over 4.5 years, reflecting a positive trend. The new railcar orders for 6,300 units valued at $830 million have contributed to this growth, resulting in a new railcar backlog of 29,400 units with an estimated value of $3.7 billion.

In the third quarter of fiscal 2024, the company's revenue was $820.2 million, representing a sequential decrease from the previous quarter's revenue of $862.7 million. However, the gross margin percentage increased to 15.1% from 14.2% in the previous quarter.

The company's manufacturing segment saw a decrease in revenue to $685.1 million from $735.8 million in the previous quarter, attributed to the timing of new railcar deliveries. Despite this, the segment's gross margin percentage improved to 10.9% from 10.8%.

In the maintenance services segment, revenue declined to $69.9 million from $75.2 million in the previous quarter, primarily due to lower hours and bill rates in repair locations. However, the gross margin percentage for this segment increased significantly to 11.7% from 8.0%.

The leasing and management services segment reported an increase in revenue to $65.2 million from $51.7 million in the previous quarter, driven by increased syndication activity. However, the gross margin percentage for this segment decreased to 62.9% from 70.8%, mainly due to externally sourced syndication activity.

Greenbrier's financial outlook for fiscal 2024 includes the expectation of delivering 23,500 – 24,000 units, with revenue projected to be in the range of $3.5 – $3.6 billion. The company also anticipates capital expenditures of approximately $150 million in manufacturing and $15 million in maintenance services.

The market has reacted to these announcements by moving the company's shares -12.0% to a price of $42.71. For more information, read the company's full 8-K submission here.

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