Rail traffic may be a little twitchy these days as coal shipments plunge, but railroads and railcar leasing companies continue to rebuild their fleets after a major plunge during the recession. While Greenbrier (GBX) undoubtedly has a lot to gain from this multi-year cycle, the question of fair value gets a little tricky.
Another Strong Quarter
Certainly Greenbrier is making hay while the sun shines. Revenue jumped 60% this quarter as the company saw a 68% increase in car deliveries. More specifically, the company saw a better than 100% increase in car manufacturing revenue, while wheel service/refurbishment revenue rose about 7% and revenue from the leasing operations rose about 15%.
Profitability also dramatically improved as the company better covers its fixed costs. Reported operating income came close to tripling, while adjusted EBITDA more than doubled. All in all, the company handily surpassed the average sell-side EPS estimate, though the outperformance in revenue was not quite as large.
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Greenbrier's Thorny Valuation
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