The Greenbrier Companies (NYSE: GBX) Posts Q3 Loss Amid Contract Dispute with General Electric (NYSE: GE)

Prominent manufacturer of transportation equipment, The Greenbrier Companies (NYSE: GBX, GBX message board) has announced a wide fiscal third quarter loss driven by goodwill write-downs and soft demand, as the company currently locked in a contract dispute involving railroad freight cars with General Electric Company (NYSE: GE), also revealed plans to implement severe cost-cutting measures.

  Undercutting the average analysts’ consensus of five cents per share in net loss, the Oregon-based company actually turned in a loss of $3 per share, or $50.5 million for the March – May business period. This is in contrast to net earnings that amounted to $8.1 million ($0.49 per share) realised during the same period of last year. But without counting the goodwill impairment charges valued at $55.7 million ($3.03 per share) pre-tax, earnings would have been $600.000 ($0.03 per share).

  Revenues for the period also underachieved Wall Street’s projection, tumbling 36 percent year-on-year to $244 million, from $382 million in the parallel period of 2008. Analysts were looking for the total quarterly revenue to arrive at $268.70 million. The standing figure is mirrors a 64 percent tailspin in railcar shipments, to 800 units from as much as 2.200 units in the year earlier third quarter.

  Current rail car order backlog was reported at 14.100 units, worth about $1.25 billion, with nearly 84 percent being a outcome of an illegitimate alteration of a $1.2 billion eight-year contract signed with a rail car unit of General Electric Company (NYSE: GE), dated back to 2007, Greenbrier lamented. GE is allegedly considering accepting fewer cars than agreed upon in the contract.

  Greenbrier, which obtained a loan facility of $75 million from WL Ross & Co. last month, also advised that it intends to idle its Mexican plant of Concarril, a move that will inevitably lead to 550 additional workers being furloughed. The company cited the softness and the uncertainty of the mainstream economy.

  On Thursday’s trading session, GBX stock closed at $5.97, 6.42 percent better than the previous closing. GE clossed at $10.86, from $10.71, the day before.


  Reference:
http://www.gbrx.com/