Thursday, The Greenbrier Companies (GBX), a supplier of transportation equipment and services to the railroad industry, reported lower earnings for the fourth quarter as revenues declined sharply amid challenging industry conditions. The company also announced that revenues are expected to be lower for 2010 compared to fiscal 2009.
The Lake Oswego, Oregon-headquartered company's net earnings for the quarter declined to $6.7 million or $0.37 per share from $7.4 million or $.45 per share in the corresponding period last year.
Financial results for the most recent quarter include severance costs, write-off of loan fees and warrant amortization expense of $2.5 million, or $0.14 per share. Results for the quarter also include tax benefits of $6.8 million, or $0.37 per share, related to a reversal of a deferred tax liability and deemed liquidation of a foreign subsidiary for tax purposes.
On average, five analysts polled by Thomson Reuters expected the company to incur a loss of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues were $230 million, down from $362 million in the same period last year. Four Street analysts expected the company to report revenues of $244.65 million for the quarter.
New railcar deliveries in the fourth quarter of 2009 were 900 units, compared to 1,800 units a year earlier.
Greenbrier's new railcar manufacturing backlog as of August 31, 2009 was 13,400 units valued at $1.16 billion, compared to 14,100 units valued at $1.25 billion as of May 31, 2009. Marine backlog was $126 million as of August 31, 2009 and $145 million as of May 31, 2009.
For the twelve month period, net loss was $54.1 million or $3.21 per share, compared to net earnings of $19.5 million or $1.19 per share in the previous year. Five analysts expected the company to report a loss of $1.21 per share for fiscal 2009.
Revenues for fiscal 2009 declined to $1.02 billion from $1.29 billion in the previous year, reflecting the impact of the economic recession. Street Analysts expected the company to report revenues of $1.03 billion for 2009.
The company said about 11,500 units, or 85% its new railcar backlog as of August 31, 2009, are subject to a long term contract with General Electric Railcar Services. 8,500 of these units, to be built over a five-year period commencing in mid 2011, are subject to fulfillment of certain conditions.
During calendar 2008, GE advised the company of its desire to substantially reduce, delay or otherwise cancel deliveries under the contract, and the company currently in discussions with GE about a contract modification. Greenbrier continues to deliver and GE continues to accept and pay for railcars under the contract. As of October 31, 2009, 328 tank cars and 200 hopper cars have been delivered under the contract
Looking ahead, given current industry trends, Greenbrier expects business to remain challenging in fiscal 2010, particularly for its new railcar manufacturing operations. As a result, management anticipates that revenues will be lower in fiscal 2010 compared to fiscal 2009.
Fiscal 2010 results are anticipated to include non-cash after-tax charges of $5.2 million, or $.27 per share, related to warrant amortization expense and a change in accounting methodology for convertible bonds. Second half fiscal 2010 results are expected to be stronger than the first half.
GBX closed Wednesday regular trading session at $9.75
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