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Rail News Home Financials

7/27/2007



Rail News: Financials

Vossloh, Wabtec, L.B. Foster, Harsco, GATX, FreightCar America report earnings


A flurry of companies that supply to the rail industry made earnings announcements yesterday. Among them:

The Vossloh Group reported record sales of $799.2 million for the first six months of 2007, a 27 percent increase compared with $628 million for the same 2006 period. The Werdohl, Germany-based company, which operates rail infrastructure and motive power business units, also moved closer to its goal of increasing share of non-European sales to 30 percent; at June's end, non-European sales accounted for 17 percent of the total, compared with less than 10 percent as of June 2006. Sales gains in North and Latin Americas, and Asia — plus the first-time consolidation of the results from new U.S. subsidiaries Pohl Corp. (now operating as Vossloh Track Material Inc.) and Cleveland Track Material Inc. — accounted for most of the share shift. Vossloh projects 2007 sales of about $1.6 billion.

Wabtec Corp. rode strong sales from its Transit Group to post record second-quarter 2007 sales of $326 million, a 24 percent increase compared with the same 2006 period. Income from operations was $46 million, or 14.1 percent of sales, due to the benefits of the Wabtec Performance System and operating leverage from higher sales, said the company, which providers a range of "value-added technology-based products and services" for the freight- and passenger-rail industry. Wabtec now expects 2007 sales growth of between 16 percent and 18 percent. "As expected, our Transit Group remains on a growth track, while the Freight Group is steady at a high level," Wabtec President and Chief Executive Officer Albert Neupaver said.

L.B. Foster Co. — a manufacturer, fabricator, and distributor of products and services for rail, construction, energy and utility markets — reported second-quarter income from continuing operations of $6.8 million, a 119.4 percent hike compared with the $3.1 million earned in the same 2006 period. Net sales increased 50 percent to $148.5 million, compared with $99.3 million in the prior year quarter. “Overall, Rail, Tubular and Construction Products sales were very strong and bottom line results increased across all segments,” said President and CEO Stan Hasselbusch “However, while our Tubular and Construction Segments expanded gross profit margins, the Rail Segment was hampered by lower distribution and concrete tie margins.”

Harsco Corp., parent of Harsco Track Technologies, recorded a record $77 million in income from continuing operations during the second quarter — a 45 percent increase compared with the $53.2 million recorded during the same 2006 period. Sales, too, totaled a record $946 million, a 24 percent increase compared with the $766 million generated during second-quarter 2006. Overall operating margins improved by 180 basis points to 14.4 percent compared with 12.6 percent in last year’s comparable period. “We foresee sizable organic growth opportunities in all of our business groups and we will further pursue a prudent and disciplined value-adding bolt-on acquisition strategy,” said Chairman and CEO Derek Hathaway.

GATX Corp., which provides lease financing and related services to a variety of transportation segments (rail included), posted second-quarter net income from continuing operations of $43.5 million, a 6 percent bump-up compared with net income of $41 million for the same 2006 period. GATX Rail's North American fleet had a utilization rate of 98 percent, and lease renewal rates in general increased 14 percent over expiring rates, with an average renewal term of 70 months. "Market conditions in rail have been generally positive in the largest portion of our fleet, general service tank cars serving the chemical and petroleum sectors," said President and CEO Brain Kenney. "Weakness continues in certain freight car types, such as coal cars and rail cars serving construction-related industries. [And] there is also a modest oversupply of cars serving the ethanol market."

FreightCar America Inc. posted second-quarter sales of $195.4 million and net income of $11.5 million, compared with $365.4 million and $36.6 million, respectively, during the same 2006 period. Orders for rail cars — the builder specializes in coal cars but also builds bulk commodity, flat, mill gondola, intermodal, and coil steel cars, and motor vehicle carriers — totaled 2,262 units during the second quarter, compared with 3,763 units for the same period in 2006. "In light of the considerably softer North American market for most rail-car types, our optimization of production at low-cost facilities, in conjunction with stringent cost control, contributed substantially to our profitability this quarter," said President and CEO Chris Ragot.




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