In reporting financial results for its second fiscal quarter ended Feb. 28, 2025, The Greenbrier Companies, Inc. (GBX) said it “continued to deliver strong results” with an aggregate gross margin “above our long-term target range” and progression toward its ROIC goal. GBX updated its guidance for fiscal 2025.
“Building on the successful North American capacity rationalization initiative begun in 2023, Greenbrier conducted a rigorous analysis of its Europe operations,” the company said. “Following an in-depth review, Greenbrier will close one manufacturing facility in our European joint venture. Facility-related rationalization costs of $6 million included $2 million of gross margin impact and $4 million of selling and administrative expense.
Net earnings were $52 million, or $1.56 per diluted share, on revenue of $762 million. Results include $4 million ($0.13 per share), net of tax and non-controlling interest, of expense related to the European facility-related rationalization and $0.04 per share of dilution related to 2028 convertible notes. Core net earnings were $56 million, or $1.69 per diluted share. GBX reported “continued strong lease fleet utilization of 98%, and aggregate gross margin of 18% “representing a sixth consecutive gross margin percentage in or above the mid-teens.” Core EBITDA was nearly $124 million, or 16% of revenue. The company generated operating cash flow of $94 million. The quarterly dividend increased by 7% to $0.32 per share, payable on May 13, 2025 to shareholders of record as of April 22, 2025, representing Greenbrier’s 44th consecutive quarterly dividend.
Quarterly diversified new railcar orders of 3,100 units valued at nearly $400 million and deliveries of 5,500 units resulted in a new railcar backlog of 20,400 units with an estimated value of $2.6 billion.
“Greenbrier continued to deliver strong results in the second quarter of fiscal 2025 as aggregate gross margin remained above our long-term target range and we progressed toward our ROIC goal,” said Lorie L. Tekorius, CEO and President. “Our strong aggregate gross margin for the quarter was driven by a more favorable product mix, continued optimization in manufacturing operations and the performance of our leasing business, which largely offset lower production volumes. While new railcar demand has been impacted in the near-term due to economic uncertainty, our deep experience allows us to flex production rates and balance production lines.
“Executing our strategic plan requires the discipline to ensure manufacturing efficiency while maintaining our commitment to return capital to shareholders. Market conditions and a comprehensive analysis in Europe led to the decision to close a facility in Romania, impacting our employees, our customers and the community. Production will be consolidated into our remaining facilities and our capacity will remain the same but with a significantly lower cost footprint. As we proceed through a thoughtful and constructive redesign of our manufacturing footprint, our Board of Directors has increased the quarterly dividend, reflecting confidence in Greenbrier’s ability to thrive in an uncertain environment. With a leading market position, a healthy backlog of new railcar orders, increasing predictability in growing areas of our business, and a continued focus on operating efficiencies, we expect sustainable results across various market conditions.”
Business Update and Outlook
Effective Sept. 1, 2024, Greenbrier combined the Maintenance Services and Manufacturing segments into a single reportable segment, Manufacturing, and renamed the Leasing & Management Services reportable segment to Leasing & Fleet Management. These changes “had no impact on the company’s consolidated results of operations or financial position. Prior period segment results have been recast to reflect the company’s new reportable segments.”
Based on “current trends and production schedules,” Greenbrier updated its guidance for fiscal 2025:
