Greenbrier Companies (GBX) has reported 7.15 percent fall in profit for the quarter ended May 31, 2017. The company has earned $32.82 million, or $1.03 a share in the quarter, compared with $35.35 million, or $1.12 a share for the same period last year.
Revenue during the quarter dropped 28.34 percent to $439.16 million from $612.87 million in the previous year period. Gross margin for the quarter contracted 31 basis points over the previous year period to 20.43 percent. Total expenses were 88.96 percent of quarterly revenues, up from 86.27 percent for the same period last year. That has resulted in a contraction of 269 basis points in operating margin to 11.04 percent.
Operating income for the quarter was $48.47 million, compared with $84.13 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $63.83 million.
William A. Furman, chairman and chief executive officer said, "Our two-part strategy is succeeding. Specifically, our strategy protects and grows our core North American businesses while we also expand internationally in promising regions for rail transportation. By adhering to this strategy, Greenbrier delivered strong third quarter results highlighted by favorable gross margins of 20% and orders for 11,000 railcars. This is a testament to our business flexibility and our team’s ability to execute in more challenging markets for our products and services."
For financial year 2017, Greenbrier Companies projects revenue to be in the range of $2,100 million to $2,300 million. The company forecasts diluted earnings per share to be in the range of $3.45 to $3.65.
Operating cash flow drops significantlyGreenbrier Companies has generated cash of $72.72 million from operating activities during the nine month period, down 62.64 percent or $121.96 million, when compared with the last year period. The company has spent $51.50 million cash to meet investing activities during the nine month period as against cash inflow of $33.45 million in the last year period
Cash flow from financing activities was $212.17 million for the nine month period as against cash outgo of $179.90 million in the last year period.
Cash and cash equivalents stood at $465.41 million as on May 31, 2017, up 117.04 percent or $250.97 million from $214.44 million on May 31, 2016.
Debt increases substantially
Greenbrier Companies has witnessed an increase in total debt over the last one year. It stood at $532.64 million as on May 31, 2017, up 74.96 percent or $228.20 million from $304.43 million on May 31, 2016. Greenbrier Companies has witnessed an increase in long-term debt over the last one year. It stood at $532.64 million as on May 31, 2017, up 74.96 percent or $228.20 million from $304.43 million on May 31, 2016. Interest coverage ratio deteriorated to 6.14 for the quarter from 22.66 for the same period last year.
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