FreightCar America, Inc. (RAIL) after getting hard hits by the COVID impact is anticipating growth opportunities. The company is seeing market conditions improving in second half of this year.
FreightCar America announced its second quarter results last month. During earnings call of those results, company’s President and CEO Jim Meyer shared that there will be an increase in activity. The industry-wide activity will remain increasing for next several quarters. Company has been getting number of customers’ enquiries. And we will be putting efforts to convert those into orders without going into more details, Meyer added.
Volume of orders in rest of the industry is likely to remain uneven and it most of those will be subject to the restoration of economic activities. These will also be tied to the various post-pandemic economic conditions, Meyer said.
FreightCar America is anticipating more opportunities ahead from prospective customers. Those include transport companies which are trying to get small number of new railcars, as said Matt Tonn, Chief Commercial Officer at FreightCar.
For next few quarters, the railcar manufacturer will be putting efforts to keep its production line more aligned. FreightCar will make its production more flexible to cater the ever-changing customer demands. This will help company to better address the likely fluctuation in railcar sites, Tonn said. We will continue our customer-centric approach to provide better solutions to them. This will include acceptance of relatively smaller orders from strategic customers. Customer enquiries have been showing a positive sign and remained growing in the third quarter, he added.
Considering its current production capabilities, the company is expecting delivering 750 to 1,000 railcars till end of this year. Pending deliveries as of June 30, amounts to a total of 1,839 railcars. But the company passed through the pandemic without facing any order cancellation.
Company’s business assumptions are based on the North American grain and intermodal traffic which grew stronger in the last few weeks, according to Tonn.