Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Greenbrier (NYSE:GBX) and the best and worst performers in the heavy transportation equipment industry.
Heavy transportation equipment companies are investing in automated vehicles that increase efficiencies and connected machinery that collects actionable data. Some are also developing electric vehicles and mobility solutions to address customers’ concerns about carbon emissions, creating new sales opportunities. Additionally, they are increasingly offering automated equipment that increases efficiencies and connected machinery that collects actionable data. On the other hand, heavy transportation equipment companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the construction and transport volumes that drive demand for these companies’ offerings.
The 14 heavy transportation equipment stocks we track reported a strong Q2. As a group, revenues were in line with analysts’ consensus estimates.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
Heavy Transportation Equipment stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.
Greenbrier (NYSE:GBX)
Having designed the industry’s first double-decker railcar in the 1980s, Greenbrier (NYSE:GBX) supplies the freight rail transportation industry with railcars and related services.
Greenbrier reported revenues of $820.2 million, down 21% year on year. This print fell short of analysts’ expectations by 10.9%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ volume estimates but a miss of analysts’ operating margin estimates.
"Greenbrier continued positive momentum in the third quarter of fiscal 2024," said Lorie L. Tekorius, CEO and President.
Greenbrier Total Revenue
Greenbrier delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Interestingly, the stock is up 7.5% since reporting and currently trades at $52.18.
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE:PLOW) offers snow and ice equipment for the roads and sidewalks.
Douglas Dynamics reported revenues of $199.9 million, down 3.6% year on year, outperforming analysts’ expectations by 9.4%. The business had an incredible quarter with an impressive beat of analysts’ earnings estimates.
Douglas Dynamics Total Revenue
The market seems content with the results as the stock is up 2.5% since reporting. It currently trades at $27.06.
Weakest Q2: Commercial Vehicle Group (NASDAQ:CVGI)
Formed from a partnership between two distinct companies, CVG (NASDAQ:CVGI) offers various components used in vehicles and systems used in warehouses.
Commercial Vehicle Group reported revenues of $229.9 million, down 12.3% year on year, falling short of analysts’ expectations by 3.3%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
As expected, the stock is down 31.5% since the results and currently trades at $3.24.
Oshkosh (NYSE:OSK) manufactures specialty vehicles for the defense, fire, emergency, and commercial industry, operating various brand subsidiaries within each industry.
Oshkosh reported revenues of $2.85 billion, up 18% year on year. This print topped analysts’ expectations by 2.5%. It was a very strong quarter as it also logged an impressive beat of analysts’ operating margin estimates and a decent beat of analysts’ earnings estimates.
Oshkosh scored the fastest revenue growth among its peers. The stock is down 7.5% since reporting and currently trades at $105.78.
Helping build race cars at one point, Allison Transmission (NYSE:ALSN) offers transmissions to original equipment manufacturers and fleet operators.
Allison Transmission reported revenues of $816 million, up 4.2% year on year. This number surpassed analysts’ expectations by 2.1%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ operating margin estimates and full-year revenue guidance exceeding analysts’ expectations.
Allison Transmission had the weakest full-year guidance update among its peers. The stock is up 17.9% since reporting and currently trades at $99.52.
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