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Greenbrier Companies (GBX +19%) is trading sharply higher after releasing its Q3 (May) results. While there were only two estimates, the company reported well ahead of analyst expectations. This supplier of freight railcars and marine barges can have varying results quarter to quarter; however, Q3 marked a return to upside reporting in both EPS and revs on a sequential and yr/yr basis. As such, investors are buying back into the stock after Q2 (Feb) showed worrying signs about the macro environment.

• While revenue was up only 2.7% yr/yr, it was up 11% sequentially to $842.7 mln and remains on track to achieve revenue guidance for FY25. GBX delivered 5,600 new railcars in Q3 with manufacturing gross margin remaining steady at 13.6%.
• Fleet utilization remained high at 98%, with the lease fleet growing modestly from the prior quarter, reflecting opportunistic additions and a strategic approach giving the macro backdrop.
• GBX's global new railcar backlog remains healthy at nearly 19,000 units, which supports its revenue outlook. Management also expressed confidence in demand for the back half of the year and into FY26, noting that the sales pipeline and inquiry levels are "definitely up."
• An important note on the backlog: management stated that several thousand additional railcars, as many as 3,000, are not included in the figure, as they are a part of railcar restoration activity. Restoration is a big part of GBX's production and given that it is not included in an already healthy backlog, is another good sign for GBX.
• What's exciting investors are the catalysts GBX sees to help boost demand heading into FY26. The near completion of its insourcing capacity expansion in Mexico is expected to deliver its full value as production scales through FY26.
• Additionally, the budget bill passed yesterday includes tax policy that management believes will energize markets for capital goods, such as railcars. Management also expects the 45Z renewable fuels bill to drive demand due to its benefits in the ethanol and soybean crush sectors.

Overall, it was a nice bounce back quarter for GBX after it saw some selling action following its Q2 report. The strong backlog shows management is confident in its near-term outlook. Shares were trading flat around $45 over the last month, so the big bump today shows investors are confident about the improvements from Q2 and the catalysts that GBX sees going into its final quarter of the fiscal year.