Greenbrier (GBX) To Report Q4 Earnings: What's In Store?

The Greenbrier Companies (NYSE:GBX) is scheduled to release fourth-quarter fiscal 2019 (ended Aug 31, 2019) results on Oct 25, before market open.

The Zacks Consensus Estimate for earnings in the fiscal fourth quarter has been revised downward 0.7% in the past 60 days. Given this backdrop, let’s delve into the factors that might have influenced the company’s quarterly performance.

Weakness pertaining to Greenbrier’s Brazilian operations due to sluggish orders is likely to have hurt Greenbrier’s performance in the fiscal fourth quarter. The European division is also likely to have fared disappointingly in the to-be-reported quarter due to supplier delivery failures.

In July, Greenbrier acquired the manufacturing operations of American Railcar Industries. As a result, the bottom line is expected to reflect the impact of escalated selling and administrative costs in the to-be-reported results. With the company’s growing investment in enhancing its facilities , capital expenditures are likely to have soared. This, in turn, is expected to get reflected in the bottom-line number.

Despite softness in revenues from Brazil and Europe, manufacturing revenues are likely to have been strong owing to growth in volume of railcar deliveries and a change in product mix. Notably, Greenbrier competes with the likes of FreightCar America (NASDAQ:RAIL) and Trinity Industries (NYSE:TRN) in the rail car manufacturing space. For the fiscal fourth quarter, management expects deliveries between 7,000 and 8,000 units. The mid-point of this guided range (7,500) is 15.3%, indicating an increase from the figure reported in third-quarter fiscal 2019.

Highlights of Q3 Earnings & Earnings History

In the last financial release, Greenbrier reported earnings of 89 cents per share that fell short of the Zacks Consensus Estimate by 7 cents. Moreover, the bottom line declined on a year-over-year basis.

In fact, the company has an unpleasant earnings surprise history, having missed the Zacks Consensus Estimate in two of the trailing four quarters as shown by the chart below.