(The following story by John D. Boyd appeared on The Journal of Commerce website on May 6, 2010.)
WASHINGTON, D.C. — FreightCar America saw first-quarter orders for future railcars surge to 3,656 units from just 339 a year earlier and 185 in the final 2009 period, which pointed to an improving outlook for the company despite a $3.3 million loss.
That loss shows a worse bottom line than the $2.4 million income in the first three months of 2009, but it reflects some improvement from just in the fourth quarter when FreightCar lost $5.5 million.
Revenue in the January-March quarter was $19.5 million, down from $39.6 million a year earlier.
The results “clearly reflect the continuation of the extended downturn in railcar demand, as well as our low backlog coming into this year,” said Ed Whalen, president and CEO. FreightCar began the quarter with an order book of just 265 cars to build, at a time when demand is held back by a still-huge overhang of idled railcars in North America.
Suppliers get paid when they deliver the equipment, and FreightCar delivered 321 railcars in the first quarter of 2010, including the sale of 105 used cars and the lease of 136 as well as new builds. That was down sharply from 697 cars delivered in the fourth quarter and 876 in the first quarter of 2009.
But the recent order surge left the company with a backlog of 3,600 units on March 31. It also had $65.9 million in cars under lease at the end of the quarter of 2010, up from $61 million three months earlier.
“We are encouraged by the orders we have received so far in 2010,” said Whalen. However, FreightCar specializes in railcars for coal hauling, where indicators are improving more slowly than for other railcar types, he said, “so we remain cautious about the outlook for the remainder of the year.”
He said the company has maintained a strong liquidity position, which could allow it “to capitalize on new business opportunities when the recovery takes hold” in the supplier market.