Greenbrier Companies (NYSE:GBX) reported what management described as a “good” first-quarter fiscal 2026 performance, pointing to disciplined execution, strong liquidity, and continued progress on operating efficiency initiatives amid a cautious ordering environment for new railcars.
On the call, CEO and President Lorie Tekorius said customers in North America and Europe remain “circumspect” about capital spending as they evaluate freight volumes, trade policy considerations, and improved rail service that has increased railroad velocity and reduced near-term demand pressure for new rolling stock. She emphasized that these factors are affecting the timing of new railcar orders but “do not change the underlying long-term replacement demand.”
Orders and backlog: momentum improved late in the quarter
Executive Vice President and President of The Americas Brian Comstock said commercial activity strengthened late in the quarter, translating into “diversified, high-quality orders” despite intense competition. Greenbrier received global orders for approximately 3,700 railcars valued at roughly $550 million, led by tank cars and covered hoppers. Comstock noted the order total included “several specialty railcar orders with higher average selling prices,” reflecting the company’s ability to support more complex customer requirements.
Backlog value was relatively unchanged, and Greenbrier ended the quarter with an estimated backlog of about 16,300 units valued at approximately $2.2 billion. Comstock said the company remains focused on backlog quality and mix to support production scheduling and margins.
In response to analyst questions about delivery visibility, management said it has “pretty good visibility,” with most open production capacity historically occurring in the summer months. Executives suggested there are opportunities for year-over-year delivery growth during that period compared with the prior summer, when production was ramping down.
Manufacturing adjustments and regional operating commentary
Management said it is proactively aligning its manufacturing footprint with current demand. Tekorius said production rates moderated slightly and headcount was adjusted “primarily in Mexico,” while the company intensified efforts around overhead optimization and operational excellence. Comstock added that Greenbrier expects to “modestly adjust rates further in the second quarter,” while also using the period to drive greater structural efficiency and cost discipline.
On Europe, Tekorius described market conditions as “complex,” noting performance was affected by operating inefficiencies as the company continues restructuring and right-sizing efforts. She said management remains confident those actions will strengthen competitiveness and profitability over time.
Brazil was described as a source of diversification. Tekorius said economic conditions remain relatively stable, customer engagement is steady, and operations delivered consistent performance.
Leasing: utilization near 98% and renewal economics improving
Management emphasized that the leasing and fleet management business continues to provide stability and recurring earnings. Comstock reported lease fleet utilization was nearly 98%, with strong retention and improving renewal economics. Fleet size remained relatively stable as the company recycled capital through railcar sales in what it described as a strong secondary market.
Executives said lease rates have been relatively stable on an absolute basis for specialty cars like tank cars, while commoditized car types have seen some pressure. However, the company said year-over-year renewals continue to show “double-digit increases,” reflecting the gap between current conditions and leases signed four to five years ago.
Greenbrier said it entered the fiscal year with about 1,500 to 1,800 cars up for renewal and has renewed around 35% so far. Management also discussed ongoing fleet optimization, including adjustments to credit quality and car-type mix, and said it is expanding use of its maintenance network to support the lease fleet.
Asked about lease fleet growth expectations, the company declined to provide a specific target but said it expects to grow the leasing business in the single-digit range, potentially somewhat higher depending on how opportunities develop.
Financial results: $706 million revenue and record liquidity for 20 quarters
CFO Michael Donfris reported first-quarter revenue of $706 million, which he said was essentially in line with expectations. Aggregate gross margin was 15%, reflecting lower production rates and deliveries than the prior quarter, partially offset by continued strength in leasing and fleet management.
Other key financial metrics cited on the call included:
- Selling and administrative expenses: $60 million, down $11 million from Q4, driven primarily by lower employee-related expenses. (Q4 included $3.1 million in European footprint rationalization costs.)
- Operating income: $61 million, about 9% of revenue.
- Diluted EPS: $1.14.
- EBITDA: $98 million, about 14% of revenue.
- Operating cash flow: $76 million, supported by earnings, fleet sale proceeds, and working capital movements.
- Liquidity: Over $895 million, including more than $300 million in cash and $535 million in available borrowing capacity—Donfris said this was the highest level in the last 20 quarters.
Donfris also noted that effective Sept. 1, 2025, Greenbrier changed the methodology for allocating syndication activity, with syndication now reflected in the manufacturing segment instead of leasing and fleet management. He said the change has no impact on consolidated results.
On capital returns, the company’s board declared a quarterly dividend of $0.32 per share, its 47th consecutive quarterly dividend. Greenbrier also repurchased about $13 million of common stock during the quarter, with approximately $65 million remaining under its current authorization.
Guidance reiterated; management discusses tariffs and USMCA
Greenbrier reiterated its fiscal 2026 outlook while updating capital expenditure expectations. Guidance provided on the call included:
- New railcar deliveries: 17,500 to 20,500 units, including approximately 1,500 units in Greenbrier Maxion in Brazil.
- Revenue: $2.7 billion to $3.2 billion.
- Aggregate gross margin: 16% to 16.5%.
- Operating margin: 9% to 9.5%.
- Earnings per share: $3.75 to $4.75.
- Manufacturing capital expenditures: approximately $80 million.
- Gross investment in leasing and fleet management: roughly $205 million.
- Proceeds from equipment sales: around $165 million.
During Q&A, management addressed an analyst question about a large gain on equipment sales in the quarter. The company said gains are part of its guidance assumptions but acknowledged timing can shift between quarters, and executives described the environment as a strong market where the company is evaluating both sales and purchases.
On trade policy, Tekorius said tariffs have been “neutral” to financial performance so far, but tariff uncertainty has weighed on customer decision-making and contributed to pauses in capital commitments. She said the industry is starting to find an “equilibrium” as pent-up demand begins to release.
Tekorius also said Greenbrier is supportive of the USMCA framework and has been engaged in submitting comments as part of the agreement’s review. She encouraged broader industry participation, arguing that the free flow of railcars across borders is critical to the rail network and the broader economy.
About Greenbrier Companies (NYSE:GBX)
The Greenbrier Companies, headquartered in Lake Oswego, Oregon, is a leading supplier of freight transportation equipment and services. The company designs, engineers and manufactures railroad freight cars—such as intermodal well cars, covered hoppers, tank cars and double-stack cars—as well as marine barges for domestic and international customers. Beyond original equipment production, Greenbrier provides aftermarket services including maintenance, repair, refurbishment and mechanical overhauls under long-term service agreements.
Greenbrier’s operations are organized into OEM and aftermarket segments, with manufacturing facilities and engineering centers across North America, Europe and Russia.
