Greenbrier (NYSE:GBX) is profiting from a slowdown in rail velocity. The company today released the order tally for its just-ended Q2, saying that it had received new orders for 5,600 railcars for a total value at around $460 million. That total includes a recent order for 1,200 intermodal platforms. The remainder is a mix of small cube covered hoppers, tank cars, boxcars for paper and forest products, gondola cars for metal goods, and other railcars.
Greenbrier said that it is taking advantage of current conditions on its market, quoting its CEO William Furman as saying that "our business is benefiting from broad-based demand for all of our car types, including increased demand for intermodal platforms as intermodal loadings accelerate and rail velocity slows due to system congestion."
Going forward, the company is well placed to benefit from potential changes in legislation concerning railway transport. Following a recent catastrophe in North Dakota, legislators are considering new laws that would outlaw an older type of fuel-carrying railcar blamed for the incident. If these laws are enacted they would likely mandate the replacement of such railcars, a potential boon for manufacturers like Greenbrier.
Eric Volkman has no position in Greenbrier. Nor does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.