FreightCar America stock soars on upbeat 2024 guidance
© Reuters.
CHICAGO – FreightCar America, Inc. (NASDAQ:RAIL), a manufacturer of railroad freight cars, reported a fourth-quarter adjusted EPS of -$0.07, which did not meet the analyst estimate of -$0.01. Despite this, the company’s stock surged over 4% following the announcement of optimistic guidance for the fiscal year 2024, indicating a positive market response.
The company’s revenue for the fourth quarter was $126.6 million, falling short of the consensus estimate of $137.35 million. This represents a slight decrease of 1.9% from the fourth quarter of the previous year, which saw revenues of $129.0 million.
Still, FreightCar America’s gross profit saw a significant increase, rising to $12.1 million with a gross margin of 9.6%, compared to a gross profit of $4.6 million and a gross margin of 3.6% in the same quarter last year.
Jim Meyer, President and CEO of FreightCar America, attributed the improved margin growth to the team’s efforts in reducing costs and creating efficiencies, even as the company faced challenges such as the US-Mexico border closure in December and foreign exchange headwinds. These factors collectively reduced results by approximately $5 million.
Looking ahead, FreightCar America provided an upbeat guidance for fiscal year 2024, projecting revenues between $520 million and $572 million, which is significantly higher than the analyst consensus of $482.3 million. The midpoint of the guidance range suggests a 52.5% growth in revenue.
Adjusted EBITDA is expected to be between $32 million and $38 million, indicating a 74.1% increase at the midpoint. The company also anticipates delivering between 4,000 and 4,400 railcars, a 39.0% increase from the previous year.
Mike Riordan, CFO of FreightCar America, emphasized the value of the company’s transformation strategy, which has allowed for an expansion of Adjusted EBITDA per car despite industry challenges. The company’s focus on efficiency and cost reduction has positioned it well for the expected increase in railcar production and deliveries in the coming year.
The positive guidance reflects the company’s confidence in its ability to drive substantial growth in both the top and bottom lines for 2024, despite existing market uncertainties. The stock’s upward movement post-earnings release underscores investor optimism regarding FreightCar America’s strategic direction and future prospects.
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