Please ensure Javascript is enabled for purposes of website accessibility

Why Greenbrier Companies Inc Stock Just Jumped 14%

By Rich Smith - Apr 5, 2017 at 1:15PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Earnings astound, and a big deal is inked.

What happened

Train-car manufacturer Greenbrier Companies (GBX -1.07%) shares jumped as much as 14% in early Wednesday trading, before settling down to enjoy an 11.3% gain by 12:30 p.m. EDT.

So what

Greenbrier reported profits of $1.09 per share in its fiscal second-quarter earnings report, released this morning, on revenues of $566.3 million.

The results were down significantly from the $1.41 per share in profits and $669.1 million in sales that Greenbrier reported a year ago. Nonetheless, they easily topped analyst predictions that the company would earn $0.84 per share on revenues of $521.5 million -- and investors are applauding accordingly.

Train heading into sunrise.

Wednesday dawns bright for Greenbrier investors. Image source: Getty Images.

Now what

Adding to investors' optimism was management's doubling down on its guidance that was updated last quarter. As of today, Greenbrier remains convinced it will book sales of between $2 billion and $2.4 billion this year, and earn between $3.25 and $3.75 per share on those sales.

On top of all of this good news, Greenbrier announced a new deal with Tokyo-based Mitsubishi UFJ Lease & Finance to supply the latter with 6,000 newly manufactured railcars through 2020. Mitsubishi UFJ has furthermore made Greenbrier its exclusive supplier of new railcars through 2023 and committed to "a combination of lease syndications and used equipment owned and originated by Greenbrier."

Greenbrier says the total value of the deal inked with Mitsubishi exceeds $1 billion.

Long story short: The good news that began at Greenbrier this morning may not be ending anytime soon.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Greenbrier Companies, Inc. Stock Quote
The Greenbrier Companies, Inc.
GBX
$37.03 (-1.07%) $0.40

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
332%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.