Railcar builder FreightCar America reported adjusted net income of $3.8 million, or $0.11 per share, in the second quarter despite weaker revenue from lower deliveries, beating market estimates of $.06 per share.
FCA (NASDAQ: RAIL) said revenue for the quarter ending June 30 totaled $118.6 million from $147.4 million in the year-ago quarter as deliveries of new railcars 939 units from 1,159 units y/y.
Gross margin improved to 15%, up from 12.5%, for a year ago, resulting in gross profit of $17.8 million compared to $18.4 million. The company in a release said the margin improvement came on more efficient production and managed pricing strategies amid volatile conditions.
Nick Randall, President and Chief Executive, in the release said the results reflect strong operational execution and healthy customer demand despite broader market uncertainties that had delayed some orders earlier in the year.
The Chicago-based company received new orders for 1,226 railcars valued at $106.9 million. This robust order activity contributed to the company’s backlog, which increased to 3,624 units valued at $316.9 million, surpassing the previous quarter by approximately 300 units.
Randall in a call with analysts said while it’s too early to predict the effect of a possible merger between Union Pacific and Norfolk Southern, any productivity gains and improvements for customers would be good for the rail industry as a whole.
Company executives said they are beginning to see a softer new railcar demand environment due in large part to uncertainties around tariff policies that are affecting customer order timing. They said total 2025 industry deliveries will fall below the previously expected 40,000 units per year average.
The company reaffirmed its guidance for fiscal year 2025, projecting deliveries between 4,500 and 4,900 units, up 7.7%.
Revenue is projected at $530 million to $595 million, up 0.6%.
In mixed results for the sector, FCA’s earnings outpaced Trinity Industries (NYSE: TRN) and Greenbrier Cos. (NASADQ: GBX), which both missed analyst expectations.
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