Greenbrier sees ‘tragic’ Ukraine war creating ‘tremendous opportunities’ for its rail business

Greenbrier Businesses Inc. reported Wednesday that it swung to a fiscal 2nd-quarter gain and earnings that additional than doubled, as the war in Ukraine supplied a enhance to the maker of railroad freight automobiles and machines.

Government Chairman William Furman stated that most commodities shipped by rail have professional upward pricing force from supply and demand constraints, due to possibly sanctions on Russia and reduced manufacturing from Russia and in Ukraine, and that has boosted railcar desire.

He additional that even though war in Ukraine is a “true tragedy,” it also supplies chances for important shifts in freight corridors and transportation modes that will enrich Greenbrier’s small business.

“The commodity marketplaces are historically major indicators for growth in rail freight,” Furman claimed, according to a FactSet transcript of Greenbrier’s publish-earnings convention get in touch with with analysts. “We count on rising worldwide commodity costs and shifting trade designs to elevate railcar desire in North The us and Brazil, and in other places in the globe.”

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“So there are great things that can arrive out of war, and we feel that our sector is a person that will profit.”

— CEO Lorie Tekorius

The corporation
documented prior to the open internet profits for the quarter to Feb. 28 of $12.8 million, or 38 cents a share, soon after a reduction of $9.1 million, or 28 cents a share, in the very same period a 12 months ago, to conquer the FactSet consensus for earnings per share of 19 cents.

Income grew 131.% to $682.8 million, perfectly over the FactSet consensus of $575.8 million, as production income jumped 175.8% to $555.7 million.

New railcar orders had been 8,500 models valued at $930 million, extra than double very last year’s new orders of 3,800 units valued at $440 million.

For fiscal 2022, the firm expects deliveries of 17,500 to 19,500 units, when compared with deliveries of 13,000 units in fiscal 2021.

Chief Executive Officer Lorie Tekorius explained in the write-up-earnings convention connect with that “while no 1 would desire for war,” what is occurring in Ukraine and Russia will generate “tremendous opportunities” for transportation by rail of bulk commodities, these as fertilizer, grains, crushed rock and petroleum goods.

“So there are good things that can occur out of war, and we feel that our marketplace is a single that will profit,” Tekorius mentioned, according to a FactSet transcript.

In the meantime, Greenbrier’s stock erased an before obtain of as a great deal as 1.8% to drop 4.% in afternoon trading Wednesday, amid a wide and sharp selloff in the transportation sector.

The stock has lose 1.9% yr to date, though the Dow Jones Transportation Normal
has slumped 11.7% and the Dow Jones Industrial Regular
has dropped 5.1%.