Shares of Greenbrier Companies Inc. dropped 5.0% in premarket trading Monday, after the railcar maker reported fiscal third-quarter profit that fell well below expectations even as revenue rose well above forecasts, as cost of revenue soared. The company said “robust” lease fleet utilization and manufacturing production and delivery levels in North America were partially offset by inflation and the impact of the war in Ukraine. Net income for the quarter to May 31 fell to $3.1 million, or 9 cents a share, from $19.7 million, or 27 cents a share, in the year-ago period. The FactSet consensus for earnings per share was 52 cents. Revenue grew 76.3% to $793.5 million, above the FactSet consensus of $734.5 million. Cost of revenue jumped 91.3%, as gross margin contracted to 9.6% from 16.7%. “Pass-through of input cost escalations protect Greenbrier when raw material prices spike, but dilute margin percentages,” said Chief Executive Lorie Tekorius. The stock has tumbled 27.1% over the past three months through Friday while the S&P 500 has slipped 11.6%.
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