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].

Group 1 - Greenbrier Companies, Inc. announced its fiscal third quarter 2025 financial results, which will be available through a Form 8-K filing with the SEC and on its investor website [1] - A live audio webcast is scheduled for today at 2:00 p.m. Pacific Time to discuss the financial results, accessible via Greenbrier's Investor Relations website [1] Group 2 - Greenbrier is a leading international supplier of equipment and services to global freight transportation markets, headquartered in Lake Oswego, Oregon [2] - The company designs, builds, and markets freight railcars in North America, Europe, and Brazil, and is a major provider of freight railcar wheel services, parts, maintenance, and retrofitting services in North America [2] - Greenbrier owns a lease fleet of approximately 16,700 railcars, primarily originating from its manufacturing operations, and offers railcar management, regulatory compliance services, and leasing services to railroads and other railcar owners in North America [2]

Company Overview - Greenbrier Companies is a leading international supplier of equipment and services to global freight transportation markets, headquartered in Lake Oswego, Oregon [2] - The company designs, builds, and markets freight railcars in North America, Europe, and Brazil, and is a major provider of freight railcar wheel services, parts, maintenance, and retrofitting services in North America [2] - Greenbrier owns a lease fleet of approximately 16,700 railcars, primarily originating from its manufacturing operations, and offers railcar management, regulatory compliance services, and leasing services to railroads and other railcar owners in North America [2] Financial Performance - Greenbrier announced a quarterly cash dividend of $0.32 per share, marking its 45th consecutive quarterly dividend [1]