U.S. Markets close in 1 hr 21 mins

FreightCar America 2Q profit up, but short of St.

CHICAGO (AP) -- FreightCar America Inc. said Monday its second-quarter net income jumped as it delivered more railcars, but profit was short of what Wall Street expected as new railcar orders fell and demand for coal shrinks amid a slow-growing broader economy.

Shares dropped almost 6 percent in trading before the opening bell.

The Chicago company earned $5.6 million, or 46 cents per share, in the April-June period, compared with a year-ago profit of $184,000, or 2 cents per share.

Revenue rose 86 percent to $181.2 million from $97.6 million.

Analysts polled by FactSet expected net income of 57 cents per share on revenue of $187.6 million.

The company delivered 2,786 railcars to customers in the most recent quarter, more than twice the number it delivered a year earlier. But orders for new railcars slowed to 967 from 1,244 in the January-March quarter and from 1,089 a year ago.

Railcar orders tend to be a good indicator of broader economic health because if railroads are moving fewer goods, they require less space to haul them. When the broader economic picture is bleak, railroads also are hesitant to spend money to refresh their fleet.

But the biggest hit for FreightCar America's second quarter was sinking demand for coal, which is used to make steel and produce electricity. Demand for coal has fallen as natural gas prices hit a decade low, causing utilities to switch to natural gas from coal, and lower industrial activity cuts the need for power.

FreightCar said it took orders for railcars that ship products other than coal in the April-June quarter as it tries to broaden its business.

Shares shed $1.23, or 5.9 percent, to $19.75 in premarket trading Monday.