(RTTNews) - Friday, rail-car maker FreightCar America Inc. (RAIL: News ) announced a plunge in its third quarter profit, as revenues plummeted on a phenomenal decline in demand. Citing "immediate" actions to control costs, the company said it will take additional reductions in head-count and salaries. Following the news, the company's shares are down about 15%.

Third quarter net income attributable to the Chicago, Illinois-based company was $1.07 million or $0.09 per share, a sharp fall from $10.04 million or $0.85 per share reported in the year-ago period.

On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.22 per share. Analysts' estimates typically exclude special items.

A phenomenal decline in demand caused third quarter revenues to decline to $55.1 million from $238.0 million last year. Wall Street analysts anticipated revenues of $78 million for the period.

FreightCar said that it received no net orders for new rail-cars in the quarter, compared with 2,329 units ordered in the same period last year. Rail-car deliveries totaled a lackluster 695 units, down from 3,082 units in the comparable period last year. The company makes aluminum and steel-bodied rail-cars for use in hauling coal, metals, automobiles and other bulk commodities in North America.
Gross profit was lower at $6.88 million, compared with $22.59 million last year. Gross margins, however, improved on higher part sales and leasing revenues, which carry more margins than new car sales, according to the company. Gross margin was 12.5%, compared with 9.5% in third quarter of 2008.

For the first nine months of fiscal 2009, the company posted better results, in the absence of of heavy charges related to plant-closures that led the year-ago results into red. FreightCar's year-to-date net income was $10.48 million or $0.88 per share versus a loss of $0.58 million or $0.05 per share reported for the same period last year. Revenues, however, fell to $199.02 million from $474.44 million for the same nine-month period of 2008.

Citing "little visibility to a recovery" in new rail-car market, the company said it would carry out additional head-count and salary reductions to cut expenses, though the exact numbers left unspecified.

RAIL is down $3.95 or 14.43%, and is currently trading at $21.65.

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by RTT Staff Writer

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