Greenbrier Reports Expected Revenue of $650MM for Q2/2019
MAR 25, 2019 - 6:45 am
The Greenbrier Companies received orders for 3,800 new railcars with an aggregate value of nearly $450 million during its fiscal second quarter which ended on February 28, 2019. Orders for the quarter included tank cars, automobile-carrying railcars and covered hopper cars, and were consistent with Greenbrier’s expectations for the period.
New railcar backlog of 26,000 units valued at $2.7 billion continued to be diversified across railcar types.
Separately, Greenbrier reported preliminary financial results for its fiscal second quarter, with an expected revenue of approximately $650 million and unadjusted EPS of $0.07 to $0.09 per share. Challenges in Romania, Gunderson and railcar repair operations impacted results by $0.29, including one-time charges of $0.14 related to loss contingencies on certain railcar contracts, primarily in Romania, along with facility closure costs in the railcar repair operations.
William A. Furman, Greenbriar chairman and CEO, said, “In the quarter, railcar order demand was solid overall. However, we are disappointed with our earnings. This was largely driven by three factors. First, poor manufacturing execution in Romania compounded by supplier delivery failures and railcar contract loss contingencies created losses in the quarter at our European railcar manufacturing operations. Next, lower overhead absorption due to increased labor costs and lower railcar build activity at our Gunderson manufacturing facility weakened results. Finally, continued challenges in railcar repair operations, including extreme winter weather and closure costs, impacted earnings. Collectively, these items negatively impacted results by $0.29per share. Greenbrier is actively addressing these performance issues and will resolve them.”
Furman continued, “In Europe, effective February 1, 2019, William Glenn re-joined Greenbrier as Chair of the Management Board and CEO of Greenbrier-Astra Rail with a mandate to improve operating profitability. A railcar production line re-opens at Gunderson in the fiscal third quarter, improving the overhead absorption and production volumes.”
Furman concluded, “Since regaining direct control of our North American railcar repair shops in September following the dissolution of GBW Railcar Services, the Greenbrier Rail Services (GRS) management team has been strategically reviewing the network. After first ensuring fair treatment was given to our employees, in the second quarter GRS announced plans to conclude operations at two railcar repair locations. Although the site evaluation by GRS leadership continues, we are optimistic about the progress we have made with our railcar repair shop network. We will have the network solidified by the end of the fourth quarter resulting in improving operating performance during the balance of this fiscal year.”
Headquartered in Lake Oswego, OR, Greenbrier designs, builds and markets freight railcars and marine barges in North America and operates end-to-end freight railcar manufacturing, engineering and repair businesses in Poland, Romania and Turkey that serve customers across Europe and in the nations of the Gulf Cooperation Council.
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