Greenbrier Cos. (NYSE: GBX) reported Q3 EPS of $1.03, $0.21 better than the analyst estimate of $0.82. Revenue for the quarter came in at $439.2 million versus the consensus estimate of $519.99 million.

• Net earnings attributable to Greenbrier for the quarter were $32.8 million, or $1.03 per diluted share, on revenue of $439.2 million.
• Adjusted EBITDA for the quarter was $63.8 million, or 14.5% of revenue.
• Finalized three major strategic transactions: formed Greenbrier-Astra Rail; executed railcar services and supply agreement with Mitsubishi UFJ Lease & Finance (MUL); and increased stake in Greenbrier-Maxion to 60% and Amsted-Maxion Cruzeiro to 24.5%.
• Diversified orders for nearly 11,000 railcars were received during the quarter, valued at $1.01 billion, including 6,000 MUL units. Order activity excludes approximately 500 units from Greenbrier-Maxion (not consolidated) and Greenbrier-Astra Rail (formed June 1, 2017). If included, total international order activity would be 1,000 units.
• New railcar backlog as of May 31, 2017 was 31,000 units with an estimated value of $3.10 billion, compared to 22,600 units with an estimated value of $2.44 billion as of February 28, 2017. Backlog includes approximately 1,000 units related to the formation of Greenbrier-Astra Rail, but does not reflect backlog for Greenbrier-Maxion.
• New railcar deliveries totaled 2,600 units for the quarter, compared to 3,900 units for the quarter ended February 28, 2017. The decline in deliveries is primarily due to the timing of railcar syndications as well as lower production rates for certain car types.
• Board declared a quarterly dividend of $0.22 per share payable on August 8, 2017 to shareholders of record as of July 18, 2017.

William A. Furman, Chairman and CEO said, "Our two-part strategy is succeeding. Specifically, our strategy protects and grows our core North American businesses while we also expand internationally in promising regions for rail transportation. By adhering to this strategy, Greenbrier delivered strong third quarter results highlighted by favorable gross margins of 20% and orders for 11,000 railcars. This is a testament to our business flexibility and our team\'s ability to execute in more challenging markets for our products and services."

Furman continued, "We are encouraged by the strong order activity in our third quarter of 11,000 units, and especially in our North American and European markets. Excluding the 6,000 units from the MUL transaction, orders in these traditional markets totaled 5,000 units, the strongest level achieved in the past two years. This total excludes orders received by Greenbrier-Maxion and Astra Rail for the trailing three months. Our backlog of 31,000 railcar units places Greenbrier on a strong footing as we approach fiscal 2018. Since the beginning of the year we have observed sustained and increasing railcar loadings across commodity types, as well as decreasing rail velocity. Both are positive indicators for the near term demand environment."

Furman added, "While we see emerging improvements in North American and European rail markets, we still expect a challenging commercial environment into calendar 2018. This makes execution of our two-part strategy even more important in the upcoming fiscal year. Although unforeseen developments in our markets can always occur, we remain cautiously optimistic."

Furman concluded, "We will continue to forge new partnerships and expand on existing relationships like the transactions we finalized recently with MUL, Greenbrier-Maxion and Astra Rail. With manufacturing operations on three continents, solid railcar backlog, strong cash flows and a flexible balance sheet, Greenbrier continues to deliver long-term value for its shareholders."

GUIDANCE:

• Greenbrier Cos. sees FY2017 EPS of $3.45-$3.65, versus the consensus of $3.49.
• New railcar deliveries to be approximately 15,000 – 16,000 units
• Revenue of approximately $2.1 – $2.3 billion, versus the consensus of $2.16 billion.

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