FreightCar America shares slide as guidance cut follows retrofit customer doubts

what happened

FreightCar America shares dropped in after-hours trading on October 19 after the railcar maker said a customer on a tank car retrofit order appears unlikely to honor its contractual commitments, according to Dow Jones Newswires. The stock changed hands at $4.64, down 21%, and had already lost 47% this year as of the close.

The company estimated third-quarter revenue at roughly $75 million to $77 million, compared with $160.5 million a year earlier. Its full-year revenue outlook was lowered to about $370 million to $410 million from the earlier $410 million to $460 million range.

FreightCar America also took 1,285 railcars linked to that order off its backlog, which leaves a preliminary count of 2,660 units as of September 30. The company had already trimmed its annual forecast in August, citing a later timing of new railcar deliveries.

why it matters

For investors, losing a sizable order, shrinking the backlog and cutting guidance twice in a few months points to weaker visibility on railcar demand and cash flow at this small industrial name. So far the reaction is confined to a single stock rather than the broader market.

market impact

FreightCar America: a lower revenue outlook and smaller backlog weigh on the stock and railcar-sector sentiment

tags

instruments