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Nov-06-2009UPDATE 1-FreightCar America Q3 profit sinks, to cut more jobs(topic overview)
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The railcar maker also said it will cut more jobs and salaries to further reduce costs, and that it was looking to expand into other markets for revenue growth. The company said it is looking at strategic initiatives to broaden its revenue sources, including refurbishment, after-market parts and services and international expansion. FreightCar America specializes in making coal-carrying railcars serving customers such as Burlington Northern Santa Fe (BNI.N: Quote, Profile, Research ), GE (GE.N: Quote, Profile, Research ) Rail Services, Union Pacific (UNP.N: Quote, Profile, Research ) and now-bankrupt CIT Group (CITGQ.PK: Quote, Profile, Research ) that has an equipment financing arm. Earlier this week, peer American Railcar (ARII.O: Quote, Profile, Research ) said it shipped 71 percent fewer railcars in the third quarter and that the weak railcar market will continue to force it to adjust production and workforce levels. [1] Nov 6 (Reuters) - FreightCar America Inc (RAIL.O: Quote, Profile, Research ) posted lower quarterly results missing market view due to continued weakness in the railcar market, and said it received no new orders during the period, sending its shares down as much as 21 percent.[1]
For the latest third quarter, FreightCar America's net income fell 89 percent to $1.1 million, or 9 cents a share, from $10 million, or 85 cents a share, a year ago.[2] The stock has ranged from $14.05 to $27.08 over the past year. FreightCar America said its profit for the three months ended Sept. 30 fell to $1.1 million, or 9 cents per share.[3]
Profit at rail equipment maker FreightCar America fell 89 percent from a year earlier to $1.1 million in the July-September period as sales fell 77 percent to $55 million.[4]
CHICAGO -- FreightCar America Inc. said Friday its third-quarter profit plunged 89 percent as railcar demand plummeted during the recession. It said it will cut additional jobs and spending given the weak outlook for the railcar market.[3] FreightCar America Inc.' s (RAIL) third-quarter profit tumbled a bigger-than-expected 89% as the company didn't see a single order for a new railcar during the quarter.[5]
Since FreightCar got no new orders in the third quarter to build freight-hauling cars, future production trends tightened as well. In the 2008 third quarter, FreightCar received customer orders to build 2,329 new units, and even this year's second quarter - in the worst of the freight traffic plunge - saw the company book 694 more cars to build.[4] The manufacturer delivered 695 railcars to customers in the third quarter, down from 1,207 units in the prior three months and 3,082 in last year's third quarter. At the end of September, its backlog of unfilled orders was 777 units, compared with 1,472 units at the end of June and 4,401 at the end of the 2008 third quarter. The $55 million in quarterly revenue is down from $104.3 million in this year's April-June quarter, when it had net income of $7 million.[4]
The railroad freight car maker said it received no orders for new railcars in the third quarter. That compares with 694 orders in the previous quarter and 2,329 orders in the third quarter of last year.[3]
Chicago-based FreightCar specializes in coal-hauling cars, but with plants in Illinois and Virginia it also builds other types of bulk commodity cars, flat cars, mill gondolas, intermodal platform, coil steel cars and motor vehicle carriers. With demand flattened for new railcars in the overstocked North American market, where hundreds of thousands of units have been idled over the last two years, Ragot said the company is closely tending to its finances.[4]
Chicago-based railcar deliveries during the quarter totaled 695 units, compared with 1,207 units a year ago. They were also down 42 percent sequentially.[2]
The company earned $10 million, or 85 cents per share, in the same quarter last year.[3] Analysts on average had expected earnings of 22 cents a share, on revenue of $78 million, according to Thomson Reuters I/B/E/S.[2] Analysts surveyed by Thomson Reuters expected a profit of 22 cents per share on $78 million in sales.[3]
On average, 7 analysts polled by Thomson Reuters expected the company to report earnings of $0.22 per share.[6]
Shares of the company were down $3.62 at $21.98 in morning trade Friday on Nasdaq.[2]
Third-quarter results missed analyst expectations, and FreightCar America shares tumbled $4.04, or 15.8 percent, to $21.56 in morning trading.[3] FreightCar America did not specify how many jobs would be cut. It said there is "little visibility" toward a recovery in the market and cash preservation will remain a high priority.[3]
At the end of December, FreightCar had $129 million in cash on hand, and listed no securities available to sell. It built the cash position to $152 million at the end of the second quarter.[4] The company said it ended the quarter with $134 million in cash and on-hand investments and had two undrawn credit facilities.[3]
Revenues fell to $55.13 million from $238 million in the year ago quarter.[6]
"We continue to pursue several strategic initiatives to broaden and strengthen our revenue sources," Ragot said, "including refurbishment, after-market parts and services and international expansion. We believe that patience will be rewarded as the railcar market continues to be soft, and we will be prudent in investing in opportunities as they present themselves."[4] "The decline in order activity in the quarter illustrates that the market for new railcars remains very challenging," President and CEO Chris Ragot said in a statement. "We believe that patience will be rewarded as the railcar market continues to be soft, and we will be prudent in investing in opportunities as they present themselves," he said.[3]
Shares slid 5.5% to $24.20 in premarket action. The stock was up 40% this year through Thursday. [5]
SOURCES
1. UPDATE 2-FreightCar America profit sinks; gets no orders in Q3 | Industries | Consumer Products & Retail | Reuters
2. UPDATE 2-FreightCar America profit sinks; gets no orders in Q3 | Reuters
3. FreightCar America 3Q profit craters, to cut jobs - Forbes.com
4. FreightCar America Profit Dives 89 Percent | Journal of Commerce
5. FreightCar 3Q Results Well Short Of Views; No Orders Received - WSJ.com
6. RTTNews - Latest Earnings,Upcoming Earnings, Pos Pre Announcements, Pos Pre Announcements , Positive Surprises, Negative Surprises, Hot Stocks, Stock Split Calendar, Stock Buybacks, Dividends, Negative, Positive PreAnnouncements,Surprises .
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