Tuesday, railcar manufacturer The Greenbrier Companies (GBX) reported a net loss for the third quarter, hurt in large part by charges related to impairment of a portion of goodwill. The company also announced its decision to cease production at its Concarril facility in Mexico, which would require furloughing an additional 550 workers.
Net loss for the quarter was $50.5 million or $3.00 per share, compared to net earnings of $8.1 million or $0.49 per share, in the corresponding period last year.
Results for the quarter included special charges of $55.7 million, before tax, or $3.03 per share, related to impairment of a portion of goodwill.
Results for the quarter also included costs of $0.9 million pre-tax, related to severance costs associated with reductions in work force and interest rate swap breakage costs. In addition, foreign currency translation losses of $2.5 million before-tax were recorded during the quarter.
Earnings before special impairment charges were $0.6 million, or $0.03 per share, compared to net earnings of $8.1 million, or $0.49 per share, in the same period last year.
On average, five analysts polled by Thomson Reuters expected the company to report a loss of $0.05 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenue slid 36% to $244 million from $382 million in the year-ago quarter. Five Street analysts expected the company to report revenue of $268.70 million for the quarter.
New railcar deliveries were approximately 800 units, compared with 2,200 units in the same period of the previous year.
New railcar manufacturing backlog as of May 31, 2009 was 14,100 units valued at $1.25 billion, compared to 15,100 units valued at $1.31 billion as of February 28, 2009. Approximately 900 units are scheduled for delivery in the remainder of fiscal 2009.
Marine backlog as of May 31, 2009 was $145 million compared to $173 million as of February 28, 2009. Approximately $20 million in marine backlog is scheduled for delivery in the remainder of fiscal year 2009.
For the nine-month period, the company reported net loss of $60.75 million or $3.61 per share compared to net earnings of $12.19 million or $0.75 per share in the year-ago period. Revenue declined to $787.7 million from $928 million in the same period last year.
The company said General Electric Railcar Services (GE) has unilaterally reduced the number of railcars they will accept under a multi-year contract. The company believes GE is in breach of its obligations under the contract.
Greenbrier said the seriousness of this problem accelerates during each quarter of fiscal 2010 and 2011 as firm delivery schedules beyond September 30, 2009, has not been agreed upon. The company said it is attempting to work with GE to find a mutually acceptable solution.
The company also said it will cease new railcar production at its Concarril facility in Mexico and furlough an additional 550 workers, principally at its Concarril facility.
GBX is currently down $0.03 or 0.43% and trades at $6.89.
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