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RAIL Nasdaq· FreightCar America Inc
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RAIL Nasdaq· FreightCar America Inc
Earnings report Q3 2023

RAIL's Revenues Decline in Latest Quarter, Driven by Decrease in Railcar Deliveries

Segments of revenue

RAIL's consolidated revenues for the three months ended September 30, 2023 were $61.9 million, compared to $85.7 million in the same period of 2022. Manufacturing segment revenues for the three months ended September 30, 2023 were $58.6 million, a decrease from $82.8 million in the corresponding prior year period. The decrease in Manufacturing segment revenues was primarily driven by a decrease in the volume of railcar units delivered. Railcar deliveries in the three months ended September 30, 2023 totaled 503 units, consisting of 382 new railcars and 121 rebuilt railcars, compared to 783 units in the same period of 2022, consisting of 483 new railcars and 300 rebuilt railcars. Corporate and Other revenues were $3.3 million for the three months ended September 30, 2023, compared to $2.9 million for the three months ended September 30, 2022.

Strengths

Despite the decline in revenues, RAIL's management highlighted that the improvement in the railcar equipment market was reflected in the increase in Corporate and Other revenues. This suggests that the company is diversifying its revenue streams and capitalizing on market opportunities beyond manufacturing railcars.

Challenges

The main weakness for RAIL in the latest quarter was the decrease in Manufacturing segment revenues due to a decrease in the volume of railcar units delivered. This decline in railcar deliveries impacted the overall revenues of the company.

Noteworthy

It is worth noting that RAIL's consolidated gross profit for the nine months ended September 30, 2023, increased to $29.7 million compared to $21.2 million for the same period in 2022. This increase in gross profit was primarily driven by a favorable price mix variance in the Manufacturing segment. It indicates that RAIL was able to maintain profitability despite the decline in revenues.

Summary

RAIL's latest quarter performance showed a decline in revenues, primarily driven by a decrease in the volume of railcar units delivered. However, the company's management highlighted the improvement in the railcar equipment market, which was reflected in the increase in Corporate and Other revenues. RAIL's consolidated gross profit increased, indicating that the company was able to maintain profitability through a favorable price mix variance. Going forward, RAIL will need to focus on increasing railcar deliveries to drive revenue growth in the manufacturing segment.

Source documents

Form 10-Q  filed on Nov 06, 2023
63 pages scanned

Reference data

Company financials Q3 revenue 61.9M
Analyst estimates Q3 EPS beat by 300.00%
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