For those who believe that the rail industry is a proxy for the health of the overall economy, then FreightCar America Inc.'s 2011 financial results could serve as another indication that a recovery is taking place in the United States -- albeit slowly.
Chicago-based FreightCar America, which manufactures railroad freight cars, reported "substantial improvement" in its fourth-quarter 2011 numbers, as well as a more than $340 million increase in full-year revenue.
Full-year revenue was $487 million, up from $142.9 million in 2010, according to the company.
FreightCar America reported full-year net income of $4.9 million, or 41 cents per diluted share, compared with a net loss of $12.8 million, or minus $1.07 per diluted share, for 2010.
Driving the vast improvement in the financial results was a dramatic uptick in railcar deliveries: FreightCar America said it delivered 6,188 railcars in 2011 (5,824 sold and 364 leased), up from 2,229 railcars in 2010 (2,079 sold and 150 leased).
The company reported fourth-quarter revenue of $187.1 million and net income of $8.5 million, or 71 cents per diluted share, compared with fourth-quarter 2010 revenue of $51 million and a net loss of $3.5 million.
"The fourth quarter's positive earnings reflect improved railcar demand as the Eastern coal-car replacement cycle continued, but this was partially offset by lower service volumes," FreightCar America President and CEO Ed Whalen said.
"The demand for coal increased in the fourth quarter as utilities worked to replenish coal stockpiles depleted by the hot summer and Midwest flooding of 2011. Fourth-quarter-2011 coal loadings in North America were 2.5% higher than in the fourth quarter of 2010.
"Coal demand has decreased thus far in 2012 as continued strength in export coal loadings was more than offset by ongoing soft demand from utilities given low industrial power consumption compounded by a very mild winter."
Whalen said the company expects the Eastern coal-car replacement cycle to "continue for some period of time," although low demand for utilities, along with increased use of natural gas, will put pressure on coal demand.
"We maintain a positive outlook on the Eastern coal-car replacement cycle, but are mindful of the fact that continued mild winter weather and low industrial-production growth may slow new coal-car demand," Whalen added.