Greenbrier Companies, Inc. (GBX) has reported a 23.03 percent fall in profit for the quarter ended Feb. 28, 2017. The company has earned $34.54 million, or $1.09 a share in the quarter, compared with $44.87 million, or $1.41 a share for the same period last year.
Revenue during the quarter dropped 15.36 percent to $566.28 million from $669.08 million in the previous year period. Gross margin for the quarter expanded 308 basis points over the previous year period to 21 percent. Total expenses were 85.60 percent of quarterly revenues, down from 86.19 percent for the same period last year. This has led to an improvement of 59 basis points in operating margin to 14.40 percent.
Operating income for the quarter was $81.52 million, compared with $92.39 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $94.52 million compared with $108.24 million in the prior year period. At the same time, adjusted EBITDA margin improved 51 basis points in the quarter to 16.69 percent from 16.18 percent in the last year period.
William A. Furman, chairman and chief executive officer, said, "We are focused on our two-part strategy to protect and enhance core North American businesses during this time of market inconstancy while we also expand internationally in targeted regions that offer promising growth opportunities for rail transportation. Our substantial advances on both prongs of this strategy resulted in a strong quarter, including a healthy aggregate gross margin of 21%. Our current backlog and production rates remain a key positive for Greenbrier. We are encouraged by the upward trend in rail traffic, order activity in our current quarter, and earnings contribution from our activities in international markets. Midway through a solid fiscal year, we are reaffirming our guidance for the full year."
For financial year 2017, Greenbrier Companies, Inc. expects revenue to be in the range of $2,000 million to $2,400 million. The company projects diluted earnings per share to be in the range of $3.25 to $3.75.
Operating cash flow drops significantly
Greenbrier Companies, Inc. has generated cash of $81.86 million from operating activities during the first half, down 45.17 percent or $67.45 million, when compared with the last year period.
Cash flow from investing activities was $14.29 million for the first half, down 71.46 percent or $35.77 million, when compared with the last year period.
Cash flow from financing activities was $227.75 million for the first six months as against cash outgo of $79.35 million in the last year period.
Cash and cash equivalents stood at $545.75 million as on Feb. 28, 2017, up 92.48 percent or $262.21 million from $283.54 million on Feb. 29, 2016.
Debt increases substantially
Greenbrier Companies, Inc. has witnessed an increase in total debt over the last one year. It stood at $532.60 million as on Feb. 28, 2017, up 34.85 percent or $137.64 million from $394.95 million on Feb. 29, 2016. Interest coverage ratio deteriorated to 14.37 for the quarter from 65.20 for the same period last year.
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