Greenbrier posts unexpected quarterly profit

AP News
Posted: Nov 12, 2009 11:49 AM

Railcar manufacturer The Greenbrier Cos. said Thursday its profit fell in the fiscal fourth quarter, but analysts had expected a loss as the company deals with a downturn in freight shipping.

Greenbrier said it expected revenue in the new fiscal year, which began in September, will be lower than in the one that just ended. But higher margins in refurbishment and parts businesses will drive higher earnings before interest, taxes, depreciation and amortization.

The company earned $6.7 million, or 37 cents per share, in the quarter ended Aug. 31. It earned $7.4 million, or 45 cents per share, in the same quarter last year.

The results included tax benefits of $6.8 million and charges such as severance costs of $2.5 million. Without those items, the company would have earned 14 cents per share.

Analysts, who usually exclude items from their forecasts, expected a loss of 3 cents per share, according to Thomson Reuters.

Revenue was $230.4 million, down from $362 million a year ago and below analysts' target of $244.7 million. The company blamed the recession, which affected all its businesses.

The company said 85 percent of its new railcar backlog _ about 11,500 cars _ are subject to a long-term contract with General Electric Co.'s railcar division. Last year, GE told Greenbrier it wanted to sharply reduce or cancel deliveries, and the companies are negotiating contract changes.

CEO William A. Furman said strong performance in Greenbrier's manufacturing and leasing business, plus the reversal of a tax liability, were key to the latest results. But the company's markets "remain challenging," he said, with a downturn in freight shipping leading to the idling of many railcars.

For the full fiscal year ended Aug. 31, Greenbrier lost $54.1 million, or $3.21 per share, on revenue of $1.02 billion. It earned $19.5 million, or $1.19 per share, on $1.29 billion in sales the previous fiscal year.

Greenbrier shares rose 35 cents, or 3.6 percent, to $10.10 in morning trading.