The Greenbrier Companies, Inc. (GBX) on Q1 2021 Results - Earnings Call Transcript
Operator: Good morning. Hello and welcome to The Greenbrier Companies' First Quarter of Fiscal 2021 Earnings Conference Call. Following today's presentation, we will conduct a question-and-answer session. Each analyst should limit themselves to only two questions. Until that time, all lines will be in a listen-only mode. At the request of The Greenbrier Companies, this conference call is being recorded for instant replay purposes. At this time, I would like to turn the conference over to Mr. Justin Roberts, Vice President and Treasurer. Mr. Roberts, you may begin. Justin Roberts: Thank you Jill. Good morning everyone and Happy New Year. Welcome to our first quarter of fiscal 2021 conference call. On today’s call, I am joined by Greenbrier’s Chairman and CEO, Bill Furman; Lorie Tekorius, President and Chief Operating Officer; and Adrian Downes, Senior Vice President and Chief Financial Officer. They will provide an update on Greenbrier's performance and our near term priorities. Following our introductory remarks, we will open up the call for questions. Bill Furman: Thank you, Justin and good morning everyone. Before I begin, I’d like to wish everyone on the call a Happy New Year. 2020 won’t be soon forgotten. Despite the real and lingering challenges of last year, the hope that ushers in each new year is especially strong now. I want to thank our employees and all our stakeholders for your support. Together, we are weathering some of the challenging days of the pandemic. I have a strong expectation Greenbrier will emerge better and even more capable when normalcy returns later this year as we all hope it will. But as we can see in the newspaper and in the media, good times are not here yet. In fact, we remain in the throes of the pandemic, and we’re puppetted by its disruptive forces in the economy and in our markets. This requires the company and its management team and board to remain disciplined as we maintain the strategic priorities. I’ve discussed over the past several quarters we believe good outcomes will follow. Regular operations continue in all of our facilities as a result of extensive health and safety protocols. Protecting the health and wellbeing of our global workforce is our very first priority. Keeping our businesses open as part of an essential industry is also highly important as is maintaining our backlog. Our ongoing practices identify and act promptly upon any potential COVID-19 exposure. Our protocols are enforced by management with a high degree of rigor at the highest levels, including our Board of Directors. The Board receives a weekly report on COVID incident rate and severity, and in some of the markets and communities where we operate, community spread continues to be at pandemic levels. In December we lost Ramón to COVID-19. Ramón I'm sorry, was a materials coordinator at our GIMSA operation. He was in his early 40s with no pre-existing risk factors. Subsequently, during the same week both his mother and his father died of COVID-19. We’re remembering him and his family during this difficult time. Ramón is the fifth member of the Greenbrier family to die from COVID-19. Earlier this year, we lost three colleagues in Mexico, and one in Romania. Lorie Tekorius: Thank you, Bill. And good morning everyone. Happy New Year. In fiscal Q1, Greenbrier operated well in spite of the weak economy. And while the financial results in the quarter were challenging with our as Bill has noted our first operational loss in nearly 10 years. I am proud of our performance against the backdrop of the pandemic and the earlier industry downturn. While financial results are important, now more than ever before companies have a responsibility to all their stakeholders. And we agree to take this responsibility seriously and have outlined in our second ESG report which was published back in October. Our focus on employees safety, diversity, equity and inclusion or DEI, the environment and governance as well as the ways we're engaging with our communities around the world. Our report which aligns with the sustainable Accounting Standards Board or SASB can be found on our website. Greenbrier remains focused on executing our COVID-19 response plan as Bill mentioned several times. We aren't complacent, and we will continue to work hard to ensure our employees stay safe. Our facilities remain essential and -- our strong liquidity and market leading positions remain intact. We remain poised to flex our manufacturing footprint as conditions evolve. Specifically, we believe Greenbrier; North American manufacturing capacity is well positioned for the current market while ensuring the capability to ramp up quickly and efficiently when demand improves. Now moving on to a discussion of our results. We delivered 3100 rail cars in the quarter, including 400 units in Brazil. We received orders for 2900 rail cars valued at approximately 260 million. And notably, orders originating from international sources accounted for about 30% of the activity in the quarter. The average sales price for orders increased sequentially across all of our geographies, primarily driven by product mix. And the net of orders and deliveries in the quarter, or book-to-bill ratio was nearly one time, resulting in an ending backlog of 23,900 units valued at 2.35 billion. Our global manufacturing group performed very well, in spite of the weak environment, generating 9% gross margins, despite a 44% sequential decline in both revenue and deliveries. And this margin performance incurred despite higher expenses at each of our facilities associated with the protocols necessary to protect our employees, while building rail cars safely and efficiently. And internationally, the order activity continues to recover with both our European and Brazilian operations largely booked into fiscal 2022. Adrian Downes: Thank you, Lorie. And good morning, everyone. As a reminder, quarterly financial information is available in the press release and supplemental slides on our website. Greenbrier performed well despite low levels of business activity reflecting the full impact of the weak demand environment, especially in North America. A few highlights in the quarter include revenue of $403 million deliveries of 3100 units, including 400 units in Brazil, aggregate gross margin of 10.1%. And our manufacturing margins held up well at 9% despite the low delivery rates. Selling and Administrative expense of $43.7 million is down 5.5% sequentially from Q4, reflecting the continued spending controls enacted in March 2020. More importantly, selling and administrative expense is down 20% from the first quarter of fiscal 2020. Operator: Thank you. Our first question will come from Justin Long with Stephens. Your line is open. Justin Long: Thanks. And good morning. Happy New Year. Bill Furman: Happy New Year, Justin. Justin Long: So maybe to kick things off, I was curious if you could comment on order flow so far in the fiscal second quarter, curious if you've seen any pickup in either North America or internationally, and maybe you could just share your view on orders going forward? I know you're talking about a second half recovery, but is that based on the assumption that orders remain pretty stable in the first half and then go to something above replacement demand in the second half, I'd love to just get a little bit more color around that view. Bill Furman: Thank you, Justin. I think starting with our backlog, one of our goals is to maintain our backlog to keep our factories operating at base rates as we now have them so we can scale upward in the -- when the recovery comes, we don't want to cripple ourselves so much, so we are seeing a positive order flow. But as you know in this industry orders can be spotty. Thus far, for the first nine months of the pandemic, we have done very well maintaining and replenishing our backlog. While the – and there are some fundamentals that suggest that strength will come back very quickly, we look at it as you probably know quite well better than we, the railroad traffic loadings, the store for cars, the velocity on rail which has fallen over two miles per hour in the last year, and that's usually a strong indicator of order pipeline. So we have a good pipeline. It's tough out there and margins are short. We're facing some competition, essentially funded by the U.S. government, which is kind of a shocking thing given the position we've taken on China's entry in the United States, but I guess I think, I think it's really just a matter of what will happen when storage cars reach what we believe will be a level around 400,000 which is a level that it will should prompt renewed investment, and that's gone up quite a bit in terms of that, that breakeven point used to be down around 300,000 and 250,000, but because of many types of cars that are just not going to be moving out, it’s around 400,000 cars. Today, the storage is roughly 426,000 cars, so we're almost at that point where a lot of demand is there, and we should start seeing a strong order book. Lorie, would you like to add something to that? Lorie Tekorius: Yes. Maybe just a little bit, I would say from talking with our commercial team. They are still having a lot of conversations with a variety of customers. We do see some activity out there, Justin. But as you know, sometimes the end of the calendar year can be a boom or a little bit of a bust. I think this year in particular, there's probably a little bit more modest activity as people tend to use the holidays as a time to take pause. We expect more of that activity to pick up early in this calendar year. And I leave you with the last thing that I heard from our commercial folks is, they're seeing better quality in some of the inquiries that we're getting around opportunities as opposed to just checking in and things like that. They are seeing a better quality to the pipeline. Justin Long: Okay, great. That's helpful. And maybe as a quick follow-up on manufacturing gross margins, I think you've talked about the fiscal second quarter typically being the most challenging of the year. So, is the right expectation that sequentially next quarter, we could see manufacturing margins get a little bit worse, and then in the back half of the year get to that low-double-digit range? Lorie Tekorius: Well, I think it's fair to assume since manufacturing is the largest part of this organization that if the second quarter is a weaker quarter, then you're going to see that reflected in manufacturing. Bill Furman: Yes, thus far Justin, the whole story here, the whole takeaway is volume, volume, volume. Alright. We've been able to maintain our margins admirably despite dramatic reductions in our revenue base, and that is quite an accomplishment. And I know you’ve followed this industry for a long time and can appreciate it. That’s not an easy thing to do, but we continue to have decent margins in our backlog. We're not pricing below costs or doing anything like that. We're showing pricing discipline, and I think others are as well. So we are hopeful that we can do well. We just have a few more months as everything sorts out that we think will pass. We hope it will pass quite quickly. Justin Long: Me too. I appreciate the time. Thanks as always. Bill Furman: Thank you, Justin. Operator: Thank you, sir. Our next question comes from Bascome Majors with Susquehanna. Your line is open, sir. Bascome Majors: Yes. Good morning, and thanks for taking my question. Following up on some of Justin's question there, you guys have really done a tremendous amount of work to lower the breakeven of the company and protect your investors and your cash flows on the downside. As recently as last summer, you were suggesting some optimism that even in a very tough marketing operating environment that you could potentially deliver a breakeven result at least on earnings for the full year? Bill Furman: Is that a question? Justin Roberts: Actually, it looks like Bascome dropped off the line. So we'll take the next caller. Lorie Tekorius: We hope that Bascome is okay. Bill Furman: We'll come back and answer that question. I think we can remember the question. Operator: Our next question then will come from Matt Elkott with Cowen. Your line is open. Matt Elkott: Good morning. Thank you. I wanted to follow up on the on the order outlook question. When you think about the initial phases of the demand recovery, where do you think the most significant impact will come from? Is it going to be larger lessors trying to lock into the current favorable pricing to sign multi-year supply agreements or do you see some pent-up demand from shippers who had been discouraged by the political and virus uncertainty and will now jump in and place those orders? Bill Furman: I don't think we'll see multi-level or multiyear orders at this stage. In the cycles, its typically come as capacity gets constrained, and lessors are concerned about having access to capital -- not to capital but to equipment. The big drivers are stored railcars, velocity, shippers will be a primary source in and among the car types. We see strength in boxcars, probably including insulated boxcars. We see a softer market for tanks. And we see some surprising strength in automotive and a number of other specific car types. As you know, our industry is very specific with respect to car types, and the storage statistics are really important to watch because sand cars, for example, are maybe 75,000 or 70,000 of those cars stored. They are not likely to come out. But that's a big chunk of 400,000, intermodal cars are actually very at capacity now. So, there's a lot of stuff going on, and it's very specific to car types – customers, but we do expect to improve our own leasing model and do more ourselves, but we will continue to work with operating lessor partners as we have before and continue our syndication activities. Matt Elkott: That makes sense. I was just curious as to whether the -- I would imagine the pricing -- railcar pricing is very competitive now. So what's the harm if you're a large lessor, and signing a supply agreement, and you don't necessarily have to exercise it right away, signing it the current prices instead of waiting until like capacity actually -- the capacity shortage kind of sneaks up on you. But what you gave, Bill, does make sense. And then, did you guys say what percentage of your backlog is international? I think last quarter it was 25% to 30%, if I remember correctly? Lorie Tekorius: And it's holding about there, Matt. It’s about 30%. Bill Furman: Also Matt, the outlook in both Brazil and in Europe, our backlog there were practically booked through 2022 in Europe. And similarly, we've had a very good resurgence in demand in South America. So really, it's the North American market that we've been principally talking about here, which is our largest market. Matt Elkott: Yes. And then thinking of Europe. Bill Furman: I think you just said, they should buy when railcar are cheaper. But they don't. For some reason they buy when they're more expensive. It's always been bafflement to me. Matt Elkott: Yes. It's interesting. And you mentioned Europe, maybe my final question about Europe. If you ask the operating lessors in Europe, that market is always -- almost always at full utilization. The lease terms are shorter, but the utilization is usually very high. And, there's an effort to move more freight in to rail from the highway in Europe. When can we expect to see a pretty material improvement in demand for railcar manufacturing as a continent begins to move freight off the highway? And can you give us an update on your market share as a manufacturer in Europe? Lorie Tekorius: I guess, if I could start, Bill, and then you could come in. I do think that we're seeing a pickup in demand in Europe right now, for exactly the reasons you were talking about. They've certainly been hit by this pandemic, like we have here in the United States, which has created a pause in their economy. They're going through a second or third round of that pause right now. But we have seen an uptick in demand in Europe. We've certainly seen some interesting behavior by some of our competitors. So, it's one of those things that we're watching very closely, just like here in North America. We're maintaining our discipline. We don't want to lock up all of our production capacity with low to no margin work. We value our work a lot more than that. And we do think that there will be steady increases in the need for railcar as we move into the second half of 2021 in Europe as well. So we're looking forward to that. And Bill? Bill Furman: Yeah. On a issue of multiyear orders that earlier asked, that's one area in Europe where two large multiyear orders were placed. And in both cases, we declined to meet the competitive price. There are roughly -- there are three or four car builders in Europe we share the lion's share of that market with . And we have refused to do multiyear pricing with fixed pricing on materials and components, because we believe in the middle of summer that those components and costs are going to go up and they're beginning to move already. We still have a very strong demand in those two marketplaces, as I mentioned. Matt Elkott: So, would you guys consider consolidating the market further in Europe? Or would you run into any regulatory issues if you tried to do that? Bill Furman: No. And yes, we are not going to -- we probably are going to round off our business model by adding more sophistication to our leasing side of the business. We will have adequate capital to invest. We tend to get paid on debt and when time is right, and to invest further in our leasing platform. We already manage over 400,000 railcars in the industry. We have a good management platform. And we've probably seen growth in that area. Not necessarily in Europe, although we're evaluating that. Matt Elkott: Thanks, Bill. Thanks everyone. Operator: Next question will come from Ken Hoexter with Bank of America. Your line is open. Ken Hoexter: Great. Good morning, Happy New Year. Really a great job on manufacturing margins given what's going on. So congrats on that. But looking, Lorie, a bit, maybe at the ASP there, and pricing, maybe we could just delve into that a little bit and talk through. Bill just mentioned the different types of cars. Can you talk about what types we're seeing in terms of the order book, and understanding that you don't give exact numbers, how do we kind of volley what's going on in terms of filling up the order book with lowest ASPs versus the future margin impact on it? Lorie Tekorius: Sure. And Ken, you certainly been following the market for a long time and know that ASP can also be driven by car type and how much material goes into a car can certainly create a higher price. I would say, here in North America, we've had a nice mix of order types, car types and order in the first quarter. I'd say there was probably a fairly more sizable chunk of boxcars, and some tank cars, which tend to have a higher ASP. And then in Europe and Brazil, again, when I said our ASPs have improved sequentially. It is across all three geographies, Brazil, North America and Europe. And again, that's primarily car type driven. But also going back to what we've talked about is our discipline of not being willing to meet some competitors pricing, but to look at what is the right price that we need to have to operate our facilities. Justin Roberts: And Ken, this is Justin, real quick. When we do have a stronger international mix, especially with a strong mix down in Brazil, for orders in the quarter. Those units are typically smaller and the ASPs are just lower in general. So it definitely does come down to not certain mix of car type but certain mix of geography as well. Ken Hoexter: Okay, helpful. And then just on your parts and leasing margin, were also kind of down significantly. Can maybe just walk through. Is that a factor of just lower business on the part side, and so therefore, you have more fixed costs. And so we see the margins fluctuate as volumes come back. And then maybe similarly on leasing, is that just a factor of rates driving that? Maybe just walk through on that how we see the rest of the year flow through on the other segment? Lorie Tekorius: Sure. On wheels, repair and parts, they are certainly being impacted, like manufacturing with lower volume of repair activity. Some asset owners tend to put cars into storage, as opposed to repairing them and then putting them in storage. So that's not necessarily an unusual phenomenon. We have made adjustments to our cost basis in that segment, and we continue to find ways to integrate it more better and reduce management costs. But we also want to maintain a platform that can be responsive as demand comes back. We've got that group working very closely with our management services group, which I said, is now managing over 400,000 cars in North America. So, we see there being tremendous synergy between the cars that we manage and having a network of repair shops. So on the wheel, repair and part side, we do expect margins to be challenged in the near term and so volume comes back. We got some benefit on the revenue side because of scrap price. On the leasing and services side, this was a quarter where we had a flood of railcars that we had acquired on the secondary market that were sold. And when we have those kinds of transactions as you'll recall, that runs through revenue and cost of goods sold. So, margin percentage is diminished, even though margin dollars are sinking. Ken Hoexter: Thank you very much for the time. And just one quick number from Adrian, if I can sneak one in just barge revenues you give, could you provide that? Bill Furman: About 20 million. Ken Hoexter: Perfect. Thank guys. Happy New Year. Appreciate the time. Bill Furman: Thanks. Operator: Thank you for your question. Our next question will come from Bascome Majors with Susquehanna, Your line is open, sir. Bascome Majors: Thank you for giving me a second shot here. I don't know how much of the first question came through. So I'll just… Bill Furman: We remember what you asked. Bascome Majors: Yes. I'll get to the point. I'm curious given the whole you're starting out in with the first quarter and some seasonal and cyclical challenges in the second. Is there enough opportunity to, to make it up in the back half and get you to that breakeven point and in a cycle trough year that you've been striving to? And if you could maybe address that in terms of earnings, as well as cash flows, I think that would be helpful? Thank you. Bill Furman: Bascome, let me just say, we're not giving earnings guidance. We said what we said. We haven't given up on achieving the breakeven in the year. That's our goal. But we're going to have to have a really, really strong fourth quarter, because I expect, we expect, economists expect a hard times ahead for the next four months with COVID-19, the death rate hit 3,700 yesterday, above the trend line that was projected just a month or two ago by leading economists and health experts. We're going to have some impact that will have an unknown lag. But if we have a very strong fourth quarter, we get stronger. snapback in orders which could occur if you watch the dynamics, I think it's possible to do so. But it's going to really depend on the last quarter of the year, for fiscal year. But I think beyond that in 2022, the company will have very strong momentum. Bascome Majors: I appreciate you addressing that within the uncertainty around us. So it sounds to me like the biggest variables would be some order recovery. And whether that happens during the fiscal year or maybe later in the calendar year into the next fiscal year. And it's more of a timing issue than anything. Could you also just maybe address any visibility you have into the cadence of your syndication channel? And when that could potentially go from an earnings headwind to a tailwind when you have some of those larger, chunkier sales, like you typically do later in your year? Bill Furman: Yes. That was principally for cash management liquidity. We're managing cash . Two other big factors that can contribute demand very rapidly as the Railcar Act which will be reintroduced in the new Congress. We came very close to getting a coalition that was very effective with that and that will have a stimulus effect, or low cost efficient, energy efficient railcars and scrapping of cars that are less efficient. An infrastructure build is also something that could bring good benefits for our industry. And it appears that that is very, very likely to occur in the new Congress. Some of that depends on what's going to occur today in rest of Georgia, but it looks like the situation is going to be very positive for those things. So those are good things to watch in our industry. And I think we're reasonably optimistic about both of those. Other than that, those are two things I think we just should focus on. Bascome Majors: Thank you. Justin Roberts: And you mentioned cash as well. And you saw we did a positive cash flow in the quarter and even in hard times for a business that can generate cash as we manage our working capital levels, that we still have more opportunity there. Bascome Majors: Thank you, Bill. Bill Furman: Thank you. Operator: Thank you. Our next question is from Allison Poliniak with Wells Fargo. Your line is open. Allison Poliniak: Hi, guys. Good morning. Bill Furman: Hi, Allison. Good morning. Allison Poliniak: I just want to go to back to, I guess, some of the Q2 cadence. You talked about, obviously a baseline of capacity, which makes sense in terms of predicting the downside, but more specifically positioning upside. But when we think about Q2, should we assume the production level that you had in Q1 is something we should see in Q2? Or could that be lower as we're thinking about our models here? Justin Roberts: I can say, there still working days and we do have a few kind of major line changeover. So Q2 could have lower production and this -- and then we actually are, as Bill mentioned, building cars onto our balance sheet as part of our syndication model, which will be syndicated into Q3 and Q4. So, from a production and delivery perspective, Q2 could be modestly lower. Allison Poliniak: Understood. And then just turning to Europe, you talked about a pretty solid backlog in Europe. Are you guys running at full capacity there? I know you've had challenges from an operations standpoint a while back. Have those kind of, I guess, correct, self correct at this point, where profitability could improve in that region for you? Bill Furman: Yes. We are not running at full capacity. And we've addressed the unfortunate operating issues that plagued this last year and into the second half of year. So we're expecting a lift up in, but we're not at full capacity. We have more that we can do there. Allison Poliniak: Got it. Thank you. Justin Roberts: Thanks, Allison. Operator: Thank you. Our last question will come from Steve Barger with KeyBanc Capital Markets. Your line is open, sir. Steve Barger: Thanks. Bill, your primary competitor here in North America as part of a coalition that wants to drive modal share by using telematics and data analytics to -- I think to improve service levels. So just being a big OEM and railcar manager, what's your position on the need for a telematics platform? Bill Furman: That's a great question. And we think it's very intriguing initiative. It's very significant that it has class one support at least a very strong sponsor. So we're studying this. There are other options. Our management platform gives us a great base, if we decide to enter that. The problem has been, nobody really wants to pay for that. And there are other details, we don't have -- we could get into offline if you want to do. But we're interested in it. We're tracking it. And it makes a great -- it's a great idea if people will pay for it, which have not been willing to allow for it. Lorie Tekorius: Yes. And I would just say that we're always in favor of things that improve our industry, right? Anything that improves the overall industry, we believe that will improve Greenbrier. Steve Barger: Well, just to follow up on that. With your liquidity position being really strong, and you're having expectation that things improve in the back half of this year. Are there any specific technology investments you're making or thinking about that could improve efficiency, whether it's internal or external? Lorie Tekorius: I'd say, our engineering group is regularly reviewing ways that we can build cars differently. And sometimes to those of us who sit at desks and look at computers all day, they may seem fairly minor. But when it comes to the railcar itself, it can have an extraordinary impact, whether it's on the carrying capacity, or the heaviness of the railcar allowing it to carry more product or the trains that have more cars in the train. So I would say that's the area where we're focused mostly on technology and improvements for the industry is around how we're doing, looking at the design of railcars and refining that. Bill had mentioned our management services group. And we manage, again, over 400,000 cars. That's an area where we're regularly updating the systems that we use within that group, where we manage maintenance, and car hire and logistics and regulatory services. So we're regularly doing things like that around. Bill Furman: The other two fronts on technology that are important is would be manufacturing technology to make our factories more efficient to use not 5G from China, but 5G technology to have smart factories, lean factories, adaptable, low changeovers. We have a team working on that. And the second would be cybersecurity. This is a growing risk to all companies we operate, where we have some vulnerabilities if we were penetrated, we've all watched those headlines. So our board is concerned about that. We're concerned about it. We're investing to protect ourselves. Steve Barger: Got it. And just one last one. You've done a nice job of diversifying internationally over the last few years. And hopefully in the future we won't have a negative catalyst on a global basis like we saw in 2020. But just philosophically, is there a vision for further diversification to mitigate cyclicality? And if so, what makes sense to add on or expand into? Bill Furman: Lorie handles our strategic work. And we're going to let her address that first I might have a comment or two on it. Lorie Tekorius: That’s a great question, Steve it is very interesting. I would say that right now we're focused more on how we can generate more benefit out of our non-manufacturing operations. So again, it's the manufacturing of new rail cars that tends to be the most cyclical. If we can look at how we approach our leasing business, our management services business, our repair network, and think about that as ways to offset, create some repeatable revenue, some and some steady cash flow out of those businesses to reduce the lows of manufacturing new railcar demand. I think that's, that's very beneficial. One of the things we can do and we're, as we do that in here in North America, we'll also look to the other geographies to see if there's ways to not necessarily copy and paste what we're doing in North America because every geography is different. Every business environment is a little bit different. We learned that early on when we went to Europe that we don't want to be the ugly American thinking that we know we have the answer to every question. But we have improved how we're approaching things. And we'll look at those other geographies as well. Steve Barger: Pretty good. I was just going to say it's hard to reinvent the wheel when you're talking about leasing or anything. Is there anything that you have line of sight to or is this kind of in the brainstorming? Bill Furman: Well, it's there's a line of sight. We intend to be more sophisticated about our leasing business to choose our partners wisely. We have some very strong operating lessor partners. We have some very strong syndication partners. But with the current tax climate, we'd be foolish not to increase the amount of annuity stream producing leases on our own books given the economics of railcar leasing. There are of course risk factors in that. But we are we are actually increasing our portfolio. And that has had some and will have some short term effect, but in the long term perspective it will create a stronger annuity stream and will be appropriately financed. Steve Barger: Thanks for the time. Bill Furman: Thank you. Thank you very much everyone for your time and attention today. And if you have any follow up questions please reach out to myself or Lorie Tekorius. Have a great day. Thank you. Lorie Tekorius: Happy New Year. Bill Furman: Happy New Year. Operator: This does conclude today's conference call. We thank you all for participating. You may now disconnect and have a great rest of your day.
The Greenbrier Companies, Inc. (GBX) Surpasses Fiscal Third Quarter Estimates
- Earnings per share of $1.86, significantly above the estimated $0.86.
- Actual revenue reached approximately $842.7 million, outperforming the forecast of $785.7 million.
- The company's financial ratios, including a price-to-sales ratio of about 0.42 and an earnings yield of about 13.75%, indicate potential undervaluation and attractiveness to investors.
The Greenbrier Companies, Inc. (NYSE:GBX), based in Lake Oswego, Oregon, is a key player in the global freight transportation market. It designs, builds, and markets freight railcars across North America, Europe, and Brazil. Greenbrier also provides freight railcar wheel services, making it a comprehensive supplier in the industry.
On July 1, 2025, GBX reported impressive financial results for its fiscal third quarter. The company achieved earnings per share of $1.86, significantly surpassing the estimated $0.86. This strong performance reflects Greenbrier's effective strategies and market position. The earnings statement will be submitted to the Securities and Exchange Commission on a Form 8-K, as highlighted by the company's investor website.
Greenbrier's actual revenue for the quarter was approximately $842.7 million, exceeding the estimated $785.7 million. This revenue growth underscores the company's robust operations and market demand for its products and services. The company's price-to-sales ratio of about 0.42 suggests that its stock is valued at 42 cents for every dollar of sales, indicating potential undervaluation.
The company's financial health is further supported by its enterprise value to sales ratio of around 0.87, reflecting a balanced valuation relative to its sales. Additionally, the enterprise value to operating cash flow ratio of approximately 10.03 shows the company's ability to cover its enterprise value with operating cash flow.
Greenbrier's debt-to-equity ratio of approximately 1.27 indicates a moderate use of debt in financing its assets. The current ratio of about 1.64 demonstrates the company's capability to meet its short-term liabilities with its short-term assets, ensuring financial stability. The earnings yield of about 13.75% provides insight into the earnings generated from each dollar invested in the stock, highlighting its potential attractiveness to investors.
The Greenbrier Companies: A Pillar in Global Freight Transportation
The Greenbrier Companies (NYSE:GBX), trading on the NYSE under the symbol GBX, is a key player in the global freight transportation market. Headquartered in Lake Oswego, Oregon, Greenbrier designs, builds, and markets freight railcars across North America, Europe, and Brazil. The company also provides essential services like railcar wheel services, parts, maintenance, and retrofitting in North America.
Greenbrier has declared a quarterly cash dividend of $0.32 per share, payable on August 7, 2025, to shareholders on record as of July 17, 2025. This marks the 45th consecutive quarterly dividend, highlighting Greenbrier's commitment to shareholder value. The company offers a dividend yield of 2.63% and a dividend per share of $1.22, with a payout ratio of 18.99%, reflecting a conservative approach to earnings distribution.
The stock is currently priced at approximately $46.46, with a market capitalization of around $1.46 billion. Recent trading saw a volume of 160,258 shares, with the stock reaching a low of $46.14 and a high of $46.78. Analysts from Susquehanna and Stephens have maintained positive and overweight ratings, respectively, with a recommendation to hold the stock.
Greenbrier's forward-looking statements highlight potential risks such as economic downturns, inflation, and geopolitical unrest. These factors could impact future performance, as noted in the company's SEC filings. Despite these uncertainties, Greenbrier's consistent dividend payments and strong market presence underscore its resilience in the freight transportation industry.
The Greenbrier Companies, Inc. (NYSE: GBX) Overview and Analyst Insights
- The average price target for NYSE:GBX has been adjusted to $62, reflecting a more conservative outlook compared to the previous quarter's target of $68.5.
- Despite a 20% stock price decline and challenges in revenue growth, Greenbrier has improved its earnings through better profit margins.
- Positive external factors, such as the evolving global energy landscape and the expansion of European rail transport, could drive long-term demand for Greenbrier's railcars.
The Greenbrier Companies, Inc. (NYSE: GBX) is a prominent player in the railroad freight car equipment industry, providing a range of services including manufacturing, wheels, repair & parts, and leasing & services. Operating across North America, Europe, and South America, Greenbrier serves a diverse clientele, ensuring a steady revenue stream. The company faces competition from other industry players, but its diversified operations give it a competitive edge.
Over the past year, analysts have adjusted their price targets for NYSE:GBX, reflecting changing market conditions and company performance. Last month, the average price target was $62, indicating a more conservative short-term outlook. This is a decrease from the last quarter's target of $68.5, when analysts were more optimistic about the stock's potential. The average price target last year was $67.33, showing relative stability with some fluctuations.
The recent decrease in the average price target could be linked to Greenbrier's 20% stock price decline and challenges in revenue growth and a shrinking order backlog. Despite these challenges, the company has improved its earnings through better profit margins. Analyst Justin Long from Stephens has set a price target of $56, suggesting a cautious yet positive outlook for the stock.
Greenbrier's future growth depends on increasing sales, which are heavily reliant on the order backlog. However, positive external factors, such as the evolving global energy landscape and the expansion of European rail transport, are expected to drive long-term demand for Greenbrier's railcars. These factors could potentially influence analysts' future price targets and the stock's performance.
Investors should monitor upcoming earnings reports and company announcements, as these could impact analysts' assessments and price targets. As highlighted by Zacks, Greenbrier is considered a potential bargain stock due to its impressive EV-to-EBITDA ratio, which provides insight into the company's valuation and earnings potential.
The Greenbrier Companies, Inc. (NYSE: GBX) Overview and Analyst Insights
- The average price target for NYSE:GBX has been adjusted to $62, reflecting a more conservative outlook compared to the previous quarter's target of $68.5.
- Despite a 20% stock price decline and challenges in revenue growth, Greenbrier has improved its earnings through better profit margins.
- Positive external factors, such as the evolving global energy landscape and the expansion of European rail transport, could drive long-term demand for Greenbrier's railcars.
The Greenbrier Companies, Inc. (NYSE: GBX) is a prominent player in the railroad freight car equipment industry, providing a range of services including manufacturing, wheels, repair & parts, and leasing & services. Operating across North America, Europe, and South America, Greenbrier serves a diverse clientele, ensuring a steady revenue stream. The company faces competition from other industry players, but its diversified operations give it a competitive edge.
Over the past year, analysts have adjusted their price targets for NYSE:GBX, reflecting changing market conditions and company performance. Last month, the average price target was $62, indicating a more conservative short-term outlook. This is a decrease from the last quarter's target of $68.5, when analysts were more optimistic about the stock's potential. The average price target last year was $67.33, showing relative stability with some fluctuations.
The recent decrease in the average price target could be linked to Greenbrier's 20% stock price decline and challenges in revenue growth and a shrinking order backlog. Despite these challenges, the company has improved its earnings through better profit margins. Analyst Justin Long from Stephens has set a price target of $56, suggesting a cautious yet positive outlook for the stock.
Greenbrier's future growth depends on increasing sales, which are heavily reliant on the order backlog. However, positive external factors, such as the evolving global energy landscape and the expansion of European rail transport, are expected to drive long-term demand for Greenbrier's railcars. These factors could potentially influence analysts' future price targets and the stock's performance.
Investors should monitor upcoming earnings reports and company announcements, as these could impact analysts' assessments and price targets. As highlighted by Zacks, Greenbrier is considered a potential bargain stock due to its impressive EV-to-EBITDA ratio, which provides insight into the company's valuation and earnings potential.
The Greenbrier Companies, Inc. (NYSE:GBX) Analyst Forecast and Market Performance
- Ken Hoexter from Lake Street set a price target of $62 for NYSE:GBX, indicating a potential increase of 38.89%.
- Greenbrier is expected to report Q2 earnings of $1.78 per share, up from $1.03 per share last year, with quarterly revenue anticipated to be $898.53 million.
- Despite a 7% increase in its quarterly dividend, GBX shares fell 9.4% to $47.10, with the current price at $45.39.
The Greenbrier Companies, Inc. (NYSE:GBX) is a leading supplier of transportation equipment and services to the railroad industry. The company designs, manufactures, and markets railroad freight car equipment in North America, Europe, and South America. Greenbrier also provides wheel services, railcar refurbishment, and leasing services. Its main competitors include Trinity Industries and American Railcar Industries.
On April 4, 2025, Ken Hoexter from Lake Street set a price target of $62 for GBX, while the stock was trading at $44.64. This suggests a potential price increase of 38.89%. As highlighted by Benzinga, the article "Greenbrier Gears Up For Q2 Print; Here Are The Recent Forecast Changes From Wall Street's Most Accurate Analysts" provides more insights into this forecast.
Greenbrier is set to release its second-quarter earnings results on April 7. Analysts expect earnings of $1.78 per share, up from $1.03 per share last year. This indicates strong growth in profitability. The company is also expected to report quarterly revenue of $898.53 million, an increase from $862.7 million a year ago.
Despite announcing a 7% increase in its quarterly dividend, Greenbrier's shares fell 9.4% to $47.10. The current price of GBX is $45.39, reflecting a decrease of 3.63% or $1.71. The stock has fluctuated between $43.24 and $46.51 today, with a market capitalization of approximately $1.42 billion.
Over the past year, GBX has reached a high of $71.06 and a low of $41.40. The trading volume on the NYSE is 496,046 shares. For those interested in analyst perspectives, Benzinga offers access to the latest analyst ratings, allowing readers to sort by stock ticker, company name, analyst firm, and other variables.
The Greenbrier Companies, Inc. (NYSE:GBX) Stock Update and Earnings Forecast
- Stephens updated their rating for NYSE:GBX to "Overweight" with a maintained "hold" action as of April 4, 2025.
- Greenbrier is expected to report earnings of $1.78 per share and quarterly revenue of $898.53 million, indicating significant growth.
- The company announced a 7% increase in its quarterly dividend, reflecting confidence in its financial health despite a recent 6.26% decrease in stock price.
The Greenbrier Companies, Inc. (NYSE:GBX) is a leading manufacturer and supplier of transportation equipment and services, primarily focusing on railcars. The company operates in a competitive industry, with key players like Trinity Industries and American Railcar Industries. Greenbrier's diverse product offerings and strategic market positioning have helped it maintain a strong presence in the railcar manufacturing sector.
On April 4, 2025, Stephens updated their rating for GBX to "Overweight," while maintaining their "hold" action. At that time, the stock price was $44.44. This update comes as Greenbrier prepares to release its second-quarter earnings results on April 7. Analysts expect earnings of $1.78 per share, a notable increase from $1.03 per share in the same period last year.
Greenbrier is also expected to report quarterly revenue of $898.53 million, up from $862.7 million a year ago. This growth reflects the company's ability to adapt and thrive in a competitive market. Additionally, Greenbrier announced a 7% increase in its quarterly dividend, signaling confidence in its financial health and commitment to returning value to shareholders.
Despite these positive forecasts, Greenbrier's shares fell by 9.4%, closing at $47.10 on Thursday. The current price of GBX is $44.15, reflecting a decrease of 6.26% or $2.95. Today, the stock has fluctuated between a low of $43.24 and a high of $45.22. Over the past year, GBX has reached a high of $71.06 and a low of $41.40.
Greenbrier's market capitalization stands at approximately $1.38 billion, with a trading volume of 216,397 shares on the NYSE. As the company gears up for its earnings release, investors will be closely watching for any updates or changes in forecasts that could impact the stock's performance.
The Greenbrier Companies, Inc. (NYSE:GBX) Analyst Forecast and Market Performance
- Ken Hoexter from Lake Street set a price target of $62 for NYSE:GBX, indicating a potential increase of 38.89%.
- Greenbrier is expected to report Q2 earnings of $1.78 per share, up from $1.03 per share last year, with quarterly revenue anticipated to be $898.53 million.
- Despite a 7% increase in its quarterly dividend, GBX shares fell 9.4% to $47.10, with the current price at $45.39.
The Greenbrier Companies, Inc. (NYSE:GBX) is a leading supplier of transportation equipment and services to the railroad industry. The company designs, manufactures, and markets railroad freight car equipment in North America, Europe, and South America. Greenbrier also provides wheel services, railcar refurbishment, and leasing services. Its main competitors include Trinity Industries and American Railcar Industries.
On April 4, 2025, Ken Hoexter from Lake Street set a price target of $62 for GBX, while the stock was trading at $44.64. This suggests a potential price increase of 38.89%. As highlighted by Benzinga, the article "Greenbrier Gears Up For Q2 Print; Here Are The Recent Forecast Changes From Wall Street's Most Accurate Analysts" provides more insights into this forecast.
Greenbrier is set to release its second-quarter earnings results on April 7. Analysts expect earnings of $1.78 per share, up from $1.03 per share last year. This indicates strong growth in profitability. The company is also expected to report quarterly revenue of $898.53 million, an increase from $862.7 million a year ago.
Despite announcing a 7% increase in its quarterly dividend, Greenbrier's shares fell 9.4% to $47.10. The current price of GBX is $45.39, reflecting a decrease of 3.63% or $1.71. The stock has fluctuated between $43.24 and $46.51 today, with a market capitalization of approximately $1.42 billion.
Over the past year, GBX has reached a high of $71.06 and a low of $41.40. The trading volume on the NYSE is 496,046 shares. For those interested in analyst perspectives, Benzinga offers access to the latest analyst ratings, allowing readers to sort by stock ticker, company name, analyst firm, and other variables.
