Greenbrier quarterly profit plunges 76% as railcar sales slide

Greenbrier's fiscal fourth-quarter net earnings collapsed 76% to $8.7 million, or 27 cents a diluted share, from $36.8 million, or $1.16, a year earlier, as the railcar builder absorbed weak demand and facility-rationalization charges.

Revenue fell 22% to $591 million from $759.5 million in the quarter ended Aug. 31, the Lake Oswego, Ore.-based company (NYSE: GBX) said Monday. That missed analysts' expectations of about $605 million. Core earnings of 39 cents a share — excluding facility-rationalization costs that cut 12 cents after tax and non-controlling interests — fell far short of the 80-cent MarketBeat consensus.

Did the order book turn a corner?

Maybe. Greenbrier booked orders for 3,400 new railcars valued at $600 million during the quarter and delivered 3,600 units. Its backlog stood at 14,000 railcars worth an estimated $2.1 billion at fiscal year-end — the first sequential increase since fiscal 2024.

Retiring CEO Lorie Tekorius said tariff uncertainty kept delaying customers' investment decisions, tank cars especially, even as order activity picked up.

"Rail traffic increases and elevated diesel prices have boosted inquiries in North America early in fiscal 2027, as freight shippers seek increased access to rail," Tekorius said in the earnings release.

The demand signal didn't reach the P&L yet. Operating margin narrowed to 4.3% from 5.5% in the prior quarter, hit by facility-related costs and lower gross margins. Manufacturing gross margin slipped to 9.2% from 9.9%, which Greenbrier blamed on the timing of railcar syndication activity and operational inefficiencies. The company runs three railcar plants in Mexico.

How big is the leasing business now?

Growing fast, and deliberately so. Management treats leasing as recurring revenue across industry cycles. The owned fleet expanded 23% during fiscal 2026 to roughly 20,900 railcars, running at 98% utilization at year-end.

Quarterly leasing and fleet-management revenue rose to $52.1 million from $47.4 million in the preceding quarter. Segment operating earnings climbed to $30.4 million from $29.2 million, though higher maintenance expenses squeezed margins.

What did the full year look like?

Bleak on every headline line. Fiscal 2026 net earnings dropped to $79 million, or $2.49 a diluted share, from $204.1 million, or $6.35. Revenue declined to $2.46 billion from $3.24 billion. Operating cash flow fell hard too — $39.6 million against $265.7 million a year earlier.

For fiscal 2027, Greenbrier projects revenue of $2.8 billion to $3.2 billion and earnings of $2.75 to $3.75 a share, with an operating margin of 7% to 7.5% and net capital expenditures of $225 million to $275 million. The guidance implies management expects profitability to recover well above the fourth quarter's 4.3% margin as deliveries build.

The board approved a quarterly dividend of 34 cents a share, payable Dec. 2 to shareholders of record Nov. 11. Greenbrier returned $56 million to shareholders through dividends and buybacks during fiscal 2026.

For rail shippers, the numbers point one way: builders' order books are refilling on the back of rising rail traffic and high diesel prices, and carriers pushing freight off trucks will find equipment supply — particularly tank cars — still constrained until those tariff-delayed investment decisions finally clear.