Greenbrier gets billion-dollar order for more than 10,000 new railcars

Transport equipment manufacturer The Greenbrier Companies Inc. said today it received orders for more than 10,000 railcar units during its fiscal second quarter, which ended February 28. The value of the orders is $1.09 billion, the company said.

The orders, while not a quarterly record for the Lake Oswego, Ore.-based maker of rail cars and marine barges, indicates continued strong demand for rail equipment needed to haul a broad range of commodities. The fiscal second-quarter activity, which includes orders of 3,500 units announced earlier this year, encompasses double-stack intermodal cars, covered hopper cars mostly used for grain transport, refrigerated and insulated boxcars, and gondolas and tank cars used to haul crude oil and other commodities, Greenbrier said.

William A. Furman, Greenbrier's chairman and CEO, said in a statement that since the start of its fiscal year the company has received orders for 24,200 new railcars valued at $2.33 billion. The cars will be delivered over a period that will extend beyond the 2016 calendar year, with only 20 percent of the equipment earmarked for energy-related markets, Furman said. Greenbrier expects to deliver about 21,000 railcars in its current fiscal year.

Recently, an unidentified customer placed what Furman called a "significant multiyear order" for railcars. The order's size, which was not disclosed, is a "testament to the positive outlook and strong industry fundamentals for the foreseeable future," he said.

Michael Baudendistel, a transportation-equipment analyst the investment firm Stifel Financial Corp., said today's order falls short of the record of 15,600 units received in the third quarter of its 2014 fiscal year. However, today's order marks a 75-percent year-over-year increase for Greenbrier, and reflects the continued diversity of the company's nonenergy order book, Baudendistel said. Most of its fiscal first-quarter orders were also outside of energy, he said in a research note.

Greenbrier's current book-to-bill ratio, the ratio of orders received to the amount billed, stands at 2 to 1. That ratio signals it may take a quarter or two before the company's backlogged orders decline from current record levels, according to Baudendistel.

Besides its core railcar manufacturing operation, Greenbrier sells reconditioned wheel sets and provides wheel services throughout the U.S. It reconditions, manufactures, and sells railcar parts, and through a joint venture repairs and refurbishes freight cars at locations across North America. The company also builds and refurbishes freight cars for the European market through its operations in Poland. Greenbrier owns approximately 8,300 railcars, and performs management services on approximately 241,000 railcars.