Q4 2024 Summary
Published Feb 2, 2025, 8:16 PM UTC- Greenbrier anticipates earnings per share (EPS) close to $5 in fiscal 2025, demonstrating continued earnings improvement.
- Strong visibility and confidence in their backlog, particularly in the automotive market, support their guidance and revenue stability for fiscal 2025.
- The disciplined behavior in the North American market and reduced speculative ordering have enhanced Greenbrier's lease origination capabilities, benefiting their competitive position.
- The company acknowledges that certain product lines, such as boxcars, have slowed down, indicating potential softness in specific market segments that could impact future revenues.
- There's potential for production gaps ("white space") in late spring to summertime, suggesting uncertainty in the order backlog and possible underutilization of manufacturing capacity in the latter half of the fiscal year.
- If operating lessors re-enter the market and begin placing speculative orders, it could erode leasing economics for Greenbrier due to increased competition and oversupply, potentially impacting profitability.
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EPS Outlook
Q: Is EPS close to $5 achievable?
A: Management confirmed they were just shy of $5 EPS in 2024 , and they have "no doubt" they will continue to show improvement in 2025. -
Market Outlook and Backlog
Q: Can you provide color on backlog and regional outlook?
A: The automotive market is "really hot" , while boxcars and other products have slowed. They're seeing a mix shift in the back half of the year and have secured a significant portion of the backlog , which provides confidence in their guidance. They have significant visibility for the first 6–7 months of the year in North America, Brazil, and Europe. -
Operating Lessors and Speculative Orders
Q: Is the decline in leasing companies' speculative orders permanent?
A: Operating lessors have been on the sidelines for 4–5 years , starting during COVID and continuing due to volatile interest rates and cost of capital issues. This has benefited Greenbrier's lease origination capabilities. There's more disciplined behavior in the North American market , and while operating lessors haven't made large speculative orders, they remain active in new car and secondary markets.