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Rail News: Financials

Greenbrier raises quarterly revenue despite steel price, casting supply struggles


During its second quarter of fiscal-year 2004, The Greenbrier Cos. recorded $167 million in revenue, a 40 percent and 23 percent increase compared with second-quarter FY03 and first-quarter FY04, respectively. The company also posted quarterly net earnings of $2.2 million compared with a net loss of $1.2 million in second-quarter FY03.

However, rising steel prices and tight truck-casting supplies hampered rail-car production, leading Greenbrier to delay building about 250 cars until the third fiscal quarter. The company also incurred $2.5 million in pre-tax costs because of scrap-steel surcharges and third-party supplied components that needed reworking, and temporarily shut down its Oregon and Canada plants during the quarter because of poor weather.

"The company was forced … to absorb some cost increases which could not be passed on to customers," said Greenbrier President and Chief Executive Officer William Furman in a prepared statement. "Starting in January, new rail-car pricing has contained escalation clauses for materials price increases."

Greenbrier's North American and European car backlog dropped to 10,000 units valued at $560 million as of Feb. 29 compared with 11,500 units valued at $620 million as of Nov. 30. During the quarter, the company received orders for 1,400 cars valued at $110 million.

"New rail-car deliveries in North America and Europe for the second fiscal quarter were 2,300 units, which brings the six-month total to 4,200 units," said Senior Vice President and Treasurer Mark Rittenbaum. "Deliveries are anticipated to be at higher rates during the second half of the fiscal year, pushing total deliveries for the year to about 10,000 units."

Also during the quarter, a Canadian court lifted a preliminary injunction preventing Greenbrier from producing 500 drop-deck center-partition cars for Canadian Pacific Railway, and the car builder opened a truck-castings foundry in Alliance, Ohio, with partners ACF Industries Inc. and ASF Keystone.

Contact Progressive Railroading editorial staff.

More News from 4/14/2004