Earnings

FreightCar America Drops Tank Car Retrofit Order From Backlog

The Tip Desk · October 27, 2026 · 3 min read

The railcar maker cut 2026 delivery guidance to 3,100–3,300 units and now sees adjusted EBITDA of $15–$19 million after removing 1,285 retrofit cars.

FreightCar America, Inc. (RAIL), a diversified manufacturer of railroad freight cars and railcar parts, removed 1,285 railcars from a tank car retrofit order from its backlog because it believes the customer is unlikely to be able to meet its obligations under the associated contract. Remaining backlog stood at 2,660 units valued at $284.5 million as of September 30, 2026.

The company said the order was to begin delivery in the second half of 2026 and continue through 2027. Its updated 2026 outlook excludes the railcars on that order that had been scheduled for 2026 delivery. No other orders in the backlog were affected, the company said.

President and Chief Executive Officer Nick Randall said the removal covers all deliveries scheduled for 2026 and 2027 and that the updated outlook reflects the company’s current operating forecast. He said remaining backlog continues to be supported by firm customer commitments.

The company cut its full-year 2026 outlook across deliveries, revenue and adjusted EBITDA. Railcar deliveries are now guided at 3,100–3,300 units, down from the August 3, 2026 range of 3,500–3,900. Revenue guidance is $370–$410 million, versus $410–$460 million. Adjusted EBITDA guidance is $15–$19 million, versus $36–$44 million.

Those August ranges had already been reduced from the May 4, 2026 outlook of 4,000–4,500 railcars, $500–$550 million of revenue and $41–$50 million of adjusted EBITDA.

Preliminary third-quarter 2026 results showed railcar deliveries of 662 units, compared with 1,304 units in the third quarter of 2025. Revenue was $75 million to $77 million, versus $160.5 million a year earlier. Adjusted EBITDA was $(0.3) million to $0.3 million, versus $17.0 million. The figures are unaudited and subject to quarter-end closing procedures.

A preliminary reconciliation showed EBITDA of $3.1 million to $3.7 million, with a negative $4.7 million adjustment for the change in fair value of warrant liability and other adjustments, $0.8 million of stock-based compensation and $0.5 million of other non-recurring items. Loss before income taxes was $(1.9) million to $(1.3) million.

In the second quarter, revenue was $113.1 million on 927 railcar deliveries, versus $118.6 million and 939 units in the second quarter of 2025. Gross margin compressed to 5.5%, or $6.2 million of gross profit including $2.2 million of workforce realignment costs, from 15.0% a year earlier. Adjusted EBITDA was $1.2 million, a 1.0% margin, versus $9.3 million and a 7.8% margin.

Backlog at June 30, 2026 was 3,972 units valued at $344 million, with backlog value up 121% sequentially from 2,058 units valued at $156 million at March 31, 2026. Randall said the production ramp began later than planned due to customer delivery timing, reducing fixed-cost absorption and shifting a portion of expected 2026 deliveries into early 2027. He said the company realigned its Castaños operating footprint and expects approximately $12 million of annualized structural savings, with benefits beginning in the third quarter.

Chief Financial Officer Mike Riordan said the updated outlook excludes the tank car retrofit order. Randall said the company’s commitment to the tank car retrofit market remains unchanged and that it continues to focus on railcar types where it has a proven record, while growing its aftermarket business.

The company expects to report full third-quarter 2026 results on Monday, November 9, 2026, after the market close, with a conference call on Tuesday, November 10, 2026, at 11:00 a.m. Eastern Time.

More on RAIL

September 28, 2026 QBook Stronger demand supports expansion as pricing diverges

FreightCar America, Inc. — all coverage and financials