Group 1 - Greenbrier Companies (GBX) has recently reached a key level of support and has overtaken the 200-day moving average, indicating a long-term bullish trend [1] - GBX shares have increased by 20% over the past four weeks, and the company holds a Zacks Rank 2 (Buy), suggesting potential for continued growth [2] - Positive earnings estimate revisions for GBX further strengthen the bullish outlook, with no estimates decreasing in the past two months and one estimate increasing [3] Group 2 - The 200-day simple moving average is a useful tool for determining long-term market trends and serves as a support or resistance level [2] - The combination of positive earnings estimate revisions and technical indicators positions GBX as a stock to watch for potential gains [3]

Core Insights - Greenbrier Companies (GBX) is experiencing strong operational efficiency and demand, positively impacting its revenue growth [1] - The company has demonstrated robust liquidity, with a current ratio of 1.48, indicating financial flexibility [10] - GBX shares have appreciated significantly, outperforming the industry average [1][3] Financial Performance - The Zacks Consensus Estimate for GBX's earnings per share has been revised upward by 28.2% for the current year and 2.8% for 2026, reflecting broker confidence [2] - GBX's shares have increased by 23% over the past year, while the Zacks Transportation - Equipment and Leasing industry has seen a decline of 9.8% [3] Operational Highlights - In Q3 2025, GBX secured 3,900 new railcar orders valued at $500 million and delivered 5,600 units, showcasing strong market activity [4][8] - The lease fleet utilization rate reached 98%, indicating efficient asset use and robust demand [8] - The backlog stands at 18,900 units, valued at $2.5 billion, providing solid revenue visibility [4][8] Financial Flexibility - GBX renewed and extended $850 million in bank facilities through 2030, enhancing its financial flexibility for long-term growth [9] - The company's strong liquidity position supports its ability to invest in operations and navigate market fluctuations [10] Industry Position - GBX holds a Zacks Rank of 2 (Buy), indicating a favorable outlook within its industry [6] - The industry rank for GBX is 25 out of 246, placing it in the top 10% of Zacks Industries, which is crucial for stock performance [6][7]

Group 1 - Greenbrier Companies (GBX) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2] - The Zacks rating system is beneficial for investors as it focuses on earnings estimate revisions, which are more objective compared to subjective Wall Street analyst ratings [2][5] - The correlation between changes in earnings estimates and stock price movements is strong, largely due to institutional investors using these estimates to determine fair value [3][4] Group 2 - Greenbrier's rising earnings estimates indicate an improvement in its underlying business, which is expected to positively influence its stock price [4][9] - The Zacks Consensus Estimate for Greenbrier is projected at $6.60 per share for the fiscal year ending August 2025, with a notable increase of 11.9% in estimates over the past three months [7] - The Zacks Rank system maintains a balanced distribution of ratings, with only the top 20% of stocks receiving a "Strong Buy" or "Buy" rating, highlighting Greenbrier's strong position in earnings estimate revisions [8][9]

Financial Performance - Revenue for the three months ended May 31, 2025, was $842.7 million, a 2.9% increase from $820.2 million in the same period of 2024[17]. - Net earnings for the three months ended May 31, 2025, were $67.5 million, compared to $40.6 million for the same period in 2024, representing a 66.3% increase[18]. - Basic earnings per common share for the three months ended May 31, 2025, were $1.92, up from $1.09 in the same period of 2024, reflecting a 76.1% increase[17]. - Comprehensive income for the three months ended May 31, 2025, was $78.7 million, compared to $41.5 million for the same period in 2024, representing an increase of 89.5%[18]. - Net earnings for the nine months ended May 31, 2025, were $172.8 million, compared to $107.4 million for the same period in 2024, representing a 60.8% increase[21]. - Earnings from operations for the three months ended May 31, 2025, were $92.6 million, compared to $72.3 million in the same period of 2024, a 28.0% increase[17]. - Earnings from operations for the nine months ended May 31, 2025, were $288.0 million, an increase from $200.7 million in the same period of 2024, representing a growth of approximately 43.5%[73]. - Net earnings attributable to Greenbrier increased by $68.8 million or 69.8% year-over-year, primarily due to higher margins[98]. Assets and Equity - Total assets as of May 31, 2025, were $4,353.2 million, compared to $4,254.5 million as of August 31, 2024, indicating a growth of 2.3%[16]. - Total equity attributable to Greenbrier increased to $1,504.0 million as of May 31, 2025, from $1,376.1 million as of August 31, 2024, marking a 9.3% increase[16]. - The balance of retained earnings as of May 31, 2025, was $1,172.5 million, an increase from $966.9 million as of May 31, 2024[21]. - The company’s total equity attributable to Greenbrier increased to $1,669.8 million as of May 31, 2025, from $1,410.2 million as of May 31, 2024, reflecting a growth of 18.4%[21]. Cash Flow and Capital Expenditures - Cash flows from operating activities provided $167.7 million for the nine months ended May 31, 2025, up from $138.4 million in the prior year[21]. - Capital expenditures for the nine months ended May 31, 2025, were $209.1 million, down from $324.7 million in the same period of 2024, indicating a decrease of 35.6%[21]. - Total cash and cash equivalents and restricted cash at the end of the period was $342.0 million, compared to $291.8 million at the end of May 31, 2024, reflecting an increase of 17.1%[21]. - As of May 31, 2025, cash and cash equivalents were $296.8 million, with available borrowings totaling $472.3 million[180]. Debt and Financing - Senior secured credit facilities totaled $1.3 billion as of May 31, 2025, with $472.3 million available to draw down[40]. - The principal balance of nonrecourse senior term debt was $311.3 million, and asset-backed term notes secured by leased railcars totaled $459.9 million[51]. - The company has $100.0 million authorized for share repurchase, with $78.2 million remaining as of May 31, 2025[213]. - The company was in compliance with all restrictive covenants related to its credit facilities as of May 31, 2025[186]. - The company expects existing funds and cash generated from operations to be sufficient to fund expected debt repayments and working capital needs over the next twelve months[190]. Revenue Segments - Manufacturing revenue for the nine months ended May 31, 2025, was $2,298.9 million, slightly down from $2,325.7 million in the same period of 2024, a decrease of 1.1%[17]. - The Manufacturing segment generated revenue of $2,370.2 million for the nine months ended May 31, 2025, compared to $2,522.6 million in 2024, indicating a decline of about 6.0%[73]. - Leasing & Fleet Management segment revenue increased by $15.8 million or 9.5% to $181.8 million for the nine months ended May 31, 2025, driven by higher rents associated with a larger fleet[150]. - Operating lease rental revenues for the nine months ended May 31, 2025, were $103.1 million, up from $88.5 million in the same period of 2024, marking an increase of approximately 16.0%[74]. Operational Efficiency - Margin percentage improved to 18.7%, a 4.0% increase compared to the same period last year, driven by operating efficiencies in the Manufacturing segment[98]. - The margin percentage for the Manufacturing segment increased by 3.8% to 14.8% for the nine months ended May 31, 2025, compared to 11.0% for the same period in 2024, reflecting improved operational efficiency[145]. - Selling and administrative expenses rose to $192.5 million for the nine months ended May 31, 2025, an increase of 7.4% from $179.2 million in the prior year, mainly due to higher employee-related costs[155]. Shareholder Returns - The company declared cash dividends of $29.7 million for the nine months ended May 31, 2025, compared to $29.1 million in the same period of 2024[21]. - A quarterly dividend of $0.32 per share was declared on June 26, 2025, and the company authorized a share repurchase program of up to $100.0 million[177][178]. Risk Management - The company utilized foreign exchange contracts totaling $141.2 million to hedge against currency risks, with a fair value of $3.2 million recorded as an asset[59]. - Interest rate swap agreements with notional amounts of $694.9 million were in place as of May 31, 2025, with an expected reclassification of approximately $8.6 million to interest expense in the next year[60]. - The company plans to continue utilizing cash flow hedges to manage market risks associated with foreign currency and interest rates[58].

Core Viewpoint - Greenbrier has demonstrated strong cost management, exceeding earnings expectations and raising profitability guidance for the year, resulting in a 20% increase in share price [1][4]. Group 1: Company Performance - Greenbrier reported earnings of $1.86 per share on revenue of $842.7 million, significantly surpassing Wall Street's consensus estimate of $0.98 per share on revenue of $795 million [4]. - Revenue increased by 2.7% year over year, attributed to operational efficiencies and gains from its leasing portfolio [4]. - The company has raised its full-year guidance for gross margin and operating margin, anticipating approximately $10 million in annual savings from optimizing its European network [6]. Group 2: Industry Context - The rail industry is currently facing a challenging operating environment, with volumes declining due to economic uncertainty and tariffs, leading to reduced capital expenditures [3]. - Despite the tough conditions, Greenbrier's performance suggests that investor sentiment may have overreacted prior to the earnings report [7]. - The cyclical nature of the business indicates that significant acceleration in performance may depend on a recovery in demand for rail services [7].

Group 1 - The article highlights NATO's commitment to increase defense spending by member states to 5% of GDP, which could significantly enhance Europe's infrastructure spending by hundreds of billions or even trillions [1]

Financial Data and Key Metrics Changes - Net earnings for Q3 2025 were $60.1 million or $1.86 per share, showing an increase both sequentially and year-over-year [4] - Revenue reached $843 million, improving by 11% sequentially [21] - Aggregate gross margin remained robust at 18%, marking the seventh consecutive quarter at or above the mid-teens long-term target [4][22] - Return on invested capital (ROIC) was 12.9%, within the target range of 10% to 14% [23] Business Line Data and Key Metrics Changes - The manufacturing gross margin for Q3 was 13.6%, steady from Q2 [11] - Leasing and Fleet Management achieved nearly $165 million in recurring revenue over the last four quarters, representing nearly 50% growth from two years ago [12] - Fleet utilization remained high at 98%, with modest growth in the leased fleet [12] Market Data and Key Metrics Changes - Greenbrier secured orders for 3,900 new railcars worth over $500 million in the quarter, with a global new railcar backlog of nearly 19,000 units [15][16] - The average age of the North American railcar fleet exceeds 20 years, driving steady growth in the railcar maintenance market [17] - In Europe, railcar orders are driven by necessity, but overall activity is muted until economic conditions improve [18] Company Strategy and Development Direction - The company is focused on doubling recurring revenues by fiscal 2028 and has renewed two bank facilities totaling $850 million [7] - Greenbrier is investing in manufacturing and leasing, with expected investments of around $145 million in manufacturing and $270 million in leasing and fleet management [26] - The company is positioned to navigate various market conditions and capitalize on opportunities as they arise [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a strong finish to the fiscal year and medium to long-term market conditions [10] - The Senate's passage of a budget bill is expected to energize markets for capital goods like railcars [9] - Management is confident in the ability to manage production rates in response to market demand and backlog visibility [38][40] Other Important Information - The company repurchased approximately $22 million in shares during the quarter, reflecting confidence in its long-term strategy [10][25] - Liquidity reached nearly $770 million, the highest level since 2023, consisting of almost $300 million in cash and over $470 million in available borrowing capacity [23][24] Q&A Session Summary Question: Clarification on interest and FX line items - Management expects interest expense to be in the 22% to 25% range for the quarter, with FX having a significant impact [31][32] Question: Production rates and order levels - Management has been adjusting production rates based on market demand and has a strong backlog of 19,000 cars, indicating optimism for future orders [38][40] Question: Confidence in backlog and order conversion - Management expressed confidence in the commercial team and anticipates that clarity around tariffs and trade policy will lead to increased orders [50][51] Question: Mix of deliveries and leased cars - Management noted that while leased fleet growth has been modest, they are becoming more active in the used car market to balance fleet growth [59]

Financial Data and Key Metrics Changes - Net earnings for Q3 2025 were $60.1 million or $1.86 per share, showing an increase both sequentially and year-over-year [5] - Revenue reached $843 million, improving by 11% sequentially [22] - Aggregate gross margin remained robust at 18%, marking the seventh consecutive quarter at or above the mid-teens long-term target [5][22] - Return on invested capital (ROIC) was 12.9%, within the target range of 10% to 14% [24] Business Line Data and Key Metrics Changes - The company delivered 5,600 new railcars in Q3, with a manufacturing gross margin of 13.6% remaining steady from Q2 [13] - Recurring revenue from leasing and fleet management reached nearly $165 million over the last four quarters, representing nearly 50% growth from two years ago [14] - Fleet utilization remained high at 98%, with modest growth in the leased fleet [14] Market Data and Key Metrics Changes - The global new railcar backlog stood at nearly 19,000 units, providing strong visibility in new railcar markets [18] - In Europe, railcar orders are driven by necessity, but activity is expected to be muted until economic conditions improve [19] - Demand in Brazil is modestly increasing as customers complete infrastructure investments [20] Company Strategy and Development Direction - The company is focused on doubling recurring revenues by fiscal 2028 and has renewed two bank facilities totaling $850 million [8] - Strategic initiatives include European footprint rationalization and North American insourcing projects, expected to yield annual savings of at least $10 million [6][7] - The company aims to maintain a disciplined approach to growing its lease fleet, ensuring predictable revenue and cash flow [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about market conditions in the medium to long term, anticipating a strong finish to the fiscal year [12] - The company is well-positioned to navigate various market conditions and capitalize on opportunities as liquidity is at its highest level since 2023 [9][11] - Management noted that the aging North American railcar fleet is a key driver for steady growth in the railcar maintenance market [18] Other Important Information - The company repurchased approximately $22 million of shares during the quarter, reflecting confidence in its long-term strategy [12] - The tax rate for the quarter was 23%, better than expected due to the strengthening Mexican peso [24] - The company updated its guidance, raising aggregate gross margin percent and operating margin percent for the remainder of fiscal 2025 [27] Q&A Session Summary Question: Guidance on interest and FX line items - Management expects interest expense to be in the 22% to 25% range for the quarter, with FX having a significant impact [31][32] Question: Production rates and order levels - Management has been adjusting production rates based on market demand and has a strong backlog of 19,000 cars, indicating future demand [38][40] Question: Confidence in order levels given low backlog - Management expressed confidence in converting demand into orders once trade policies stabilize, with several catalysts expected to drive demand [49][51] Question: Mix of deliveries and leased cars - The company is becoming more active in the used car market to balance its leasing business and is committed to growing the leasing fleet [58]

Financial Performance - Greenbrier's net earnings attributable reached $60 million, or $1.86 per diluted share, with revenue of $843 million[5] - The company achieved an aggregate gross margin of 18%[5] - Greenbrier's EBITDA was $129 million, representing 15% of revenue[5] - Operating cash flow was nearly $140 million[5] Orders and Backlog - New railcar orders totaled 3,900 units, valued at over $500 million[5] - Railcar deliveries amounted to 5,600 units[5] - The new railcar backlog stands at 18,900 units, with an estimated value of $2.5 billion[5] Capital Allocation and Liquidity - Greenbrier renewed and extended $850 million of bank facilities into 2030[5] - The company repurchased 507 thousand shares for nearly $22 million[5] - Available liquidity is approximately $770 million[6] Leasing and Fleet Management - Lease fleet utilization remained strong at 98%[5] - The company has a lease fleet of approximately 16,800 railcars[6, 11] - Recurring revenue grew by 45%[6] Operational Efficiency - Closure of one manufacturing facility in the European joint venture is expected to yield annual savings of at least $10 million[5]

Financial Performance - Net earnings attributable to Greenbrier were $60 million, or $1.86 per diluted share, on revenue of $843 million[3]. - Revenue for the three months ended May 31, 2025, was $842.7 million, a 2% increase from $820.2 million in the same period of 2024[14]. - Net earnings attributable to Greenbrier for the three months ended May 31, 2025, were $60.1 million, up 77% from $33.9 million in the same period of 2024[14]. - Basic earnings per common share increased to $1.92 for the three months ended May 31, 2025, compared to $1.09 for the same period in 2024, representing a 76% increase[14]. - The net earnings attributable to Greenbrier for the fiscal year were $160.1 million, resulting in a diluted earnings per share of $4.96[23]. Revenue and Orders - New railcar orders totaled 3,900 units valued at over $500 million, with a backlog of 18,900 units estimated at $2.5 billion[3]. - The company reported a total backlog of 18,900 units as of May 31, 2025, down from 20,400 units at the beginning of the period[26]. - Total revenue for fiscal 2024 reached $3,544.7 million, with manufacturing contributing $3,312.4 million and leasing & fleet management contributing $232.3 million[23]. Cash Flow and Capital Expenditures - Operating cash flow reached nearly $140 million, reflecting increased earnings and working capital efficiencies[3]. - Cash flows from operating activities for the nine months ended May 31, 2025, were $167.7 million, an increase from $138.4 million in the same period of 2024[15]. - Capital expenditures for manufacturing are updated to $145 million, while net capital expenditures are projected at $340 million[5]. Margins and Earnings - Aggregate gross margin was 18%, marking the seventh consecutive quarter meeting or exceeding the mid-teens gross margin goal[3]. - The company updated its fiscal 2025 guidance, maintaining revenue guidance of $3.15 billion to $3.35 billion and raising aggregate gross margin guidance to 17.7% - 18.3%[5]. - Core EBITDA for the three months ended May 31, 2025, was $128.5 million, compared to $123.9 million for the previous quarter[27]. Leasing and Fleet Management - The lease fleet utilization rate was strong at 98%[3]. - Greenbrier's leasing strategy aims to double recurring revenue from leasing and management fees by investing up to $300 million net annually over the next five years[18]. - The Greenbrier Lease Fleet increased to 16,800 units as of May 31, 2025, up from 16,600 units at the end of February 2025[19]. - Total Leasing non-recourse debt was $1,002.6 million as of May 31, 2025, with a fleet leverage of 77%[19]. - The leasing & fleet management segment generated external revenue of $64.5 million with earnings from operations of $45.3 million for the same period[25]. Dividends and Shareholder Returns - Greenbrier's board approved a quarterly dividend of $0.32 per share, representing the 45th consecutive quarterly dividend[3]. - Dividends per common share increased to $0.32 for the three months ended May 31, 2025, compared to $0.30 in the same period of 2024[14]. - The company maintained a dividend of $0.30 per common share throughout the fiscal year, totaling $1.20 per share[23]. Financial Flexibility and Debt - The company renewed and extended $850 million of bank facilities into 2030, enhancing financial flexibility[3]. - Total consolidated debt as of May 31, 2025, was $1,762.7 million, slightly up from $1,756.9 million at the end of February 2025[31]. - The effective tax rate decreased to 22.8% from 32.3%, attributed to a favorable geographic mix of earnings[7]. Future Outlook - The company anticipates continued growth in leasing performance and backlog orders, despite potential economic uncertainties[32].