Greenbrier Earnings Preview: Surge in Revenue Expected

Greenbrier Companies

will be reporting its third-quarter fiscal 2011 results Friday, July 8, before the opening bell. The Railway Supply Institute recently reported that orders and deliveries of railcars were up, a potential early sign of a revival of the railcar industry. Analysts are looking for Greenbrier to report per-share earnings of $0.21, which is down from $0.23 per share in the same period of last year. The consensus earnings estimate was $0.23 per share 60 days ago. But analysts also expect to see revenues of $370.6 million, an increase of 75.3% from a year ago. Note that Greenbrier posted bigger-than-expected losses in the past three quarters. But analysts are looking for a profit for the full year, as well as full-year revenues that are 63.2% higher than last year.

Lake Oswego, Oregon-based Greenbrier Companies designs, manufactures and markets railroad freight car equipment and marine barges in North America and Europe. The company also offers repair and refurbishment of railcars, finance lease programs, railcar maintenance management and fleet management. During the three months that ended in May, Greenbrier announced an order for 4,200 railcar platforms, closed a senior note offering and forecast profitability in the second half, driven in part by higher new railcar deliveries and production efficiencies.

Greenbrier's long-term earnings per share growth forecast is 10.5%. But the forward P/E ratio is 18.3 and the PEG ratio is 1.7. Yet, analysts' consensus recommendation is to buy the stock, and they have a mean price target of $32.86 per share. That offers the stock plenty of room to run from today's opening price of $21.46. Shares hit a 52-week high of $30.38 back in March but have dropped more than 20% in the past three months. However, the stock has outperformed competitor GATX

and the railroad industry average, as well as the broader markets, over the past year.

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