Greenbrier earnings fall 5% despite higher revenues in FY2016

The railroad transportation equipment manufacturer posted net earnings of $183.2 million in fiscal 2016, ended Aug. 31, a 5 percent decrease from the previous fiscal year, even as revenues reached a record $2.68 billion.    Greenbrier Companies, Inc. saw net earnings fall 5 percent to $183.2 million in its fiscal year 2016, which ended Aug. 31, despite reporting record annual revenues, according to the company’s most recent financial statements.
   The railroad transportation equipment manufacturer posted diluted earnings per common share (EPS) of $5.73 per diluted share, compared with $5.93 per diluted share the previous fiscal year, even as revenues grew 2.8 percent to $2.68 billion.
   EPS was in line with company estimates of between $5.70 per diluted share and $5.90 per diluted share, but the record revenues still fell short of the $2.8 billion projection given last quarter.
   New railcar deliveries totaled 20,300 units in FY2016, in line with expectations, and the company received new orders for 7,500 units valued over $700 million across a broad range of railcar types.
   Greenbrier Chairman and CEO William A. Furman attributed the earnings decline primarily to industry challenges and a “weaker” North American market during fiscal 2016.
   “We delivered strong results for the fourth quarter and fiscal 2016,” said Furman. “We ended the year with a strong balance sheet, ample liquidity and very little net debt. This positions Greenbrier to continue to invest internationally in high ROIC markets, as well as successfully navigate through less robust North American market conditions.
   “Entering fiscal 2017, our diversified backlog provides us with strong visibility, while we remain adaptable and prepared for market recovery and growth,” he added. “Recently, we worked with customers to resolve commercial terms related to 1,200 sand cars. Under these arrangements, Greenbrier received meaningful monetary and other valuable economic consideration.”
   Internationally, the company is looking to capture share in emerging freight car markets like the Gulf Cooperation Council nations, Africa, Euraisa, and Latin America, said Furman.
   Greenbrier in August acquired a 19.5 percent ownership stake in the railcar casting operations of Amsted-Maxion Cruzeiro, increasing the company’s direct and indirect interest in railcar manufacturer Greenbrier-Maxion to 35 percent and expanding its manufacturing presence in Brazil.
   In September, the company began fulfillment of the 1,200-tank-car order placed by Saudi Railway Company (SAR) in early fiscal 2016.
   Looking forward to fiscal 2017, Greenbrier is projecting deliveries of between 14,000 and 16,000 railcar units, revenues of between $2 billion and $2.4 billion, and diluted EPS in the range of $3.25 to $3.75 per diluted share.
   “In the year ahead, a moderating railcar replacement cycle in North America will favorably position well-capitalized companies like Greenbrier to seize opportunities in the market, which often emerge suddenly,” said Furman. “We remain committed to our overall strategy of investing for future growth and generating long-term value for our shareholders with an emphasis on solid ROIC.”