Triton International Limited (TRTN) Tops Q4 EPS by 7c, Revenues Miss

Triton International Limited (NYSE: TRTN) reported Q4 EPS of $1.25, $0.07 better than the analyst estimate of $1.18. Revenue for the quarter came in at $355.4 million versus the consensus estimate of $362.78 million.

• Adjusted net income was $99.4 million in the fourth quarter of 2018, or $1.25 per diluted share, an increase of 47.1% per diluted share from the fourth quarter of 2017 and an increase of 6.8% per diluted share from the third quarter of 2018.
• Net income attributable to shareholders was $69.6 million in the fourth quarter of 2018, or $0.87 per diluted share. Net income attributable to shareholders was reduced by $24.7 million non-cash income tax expense for intra-entity transfers of containers.
• Adjusted net income was $363.0 million for the full year of 2018, or $4.52 per diluted share, an increase of 62.6% per diluted share from 2017.
• Net income attributable to shareholders was $349.6 million for the full year of 2018, or $4.35 per diluted share.
• Utilization averaged 98.2% for the fourth quarter of 2018 and averaged 98.6% for the full year 2018.
• Triton has purchased 2.1 million shares under the share repurchase program authorized in August 2018.
• Triton's Board of Directors announced a quarterly dividend of $0.52 per share payable on March 28, 2019 to shareholders of record as of March 12, 2019.

"Triton’s strong performance in the fourth quarter of 2018 provided an excellent finish to an outstanding year", commented Brian M. Sondey, Chief Executive Officer of Triton. "We generated $99.4 million of Adjusted net income in the fourth quarter, or $1.25 per share, which represents an increase of 6.8% from the third quarter of 2018 and an increase of 47.1% from the fourth quarter of 2017. Our Adjusted net income for the full year of 2018 was $363.0 million, or $4.52 per share, which represents an increase of 62.6% from 2017. We also realized a Return on equity of 16.7% for the full year of 2018 and annualized Return on equity of 17.7% in the fourth quarter."

"Triton’s strong financial results in 2018 were driven by outstanding operational performance, our unique competitive advantages and a favorable market environment. Container pick-up activity remained strong for most of the year, reflecting ongoing trade growth and a tight supply / demand balance for containers. We also continued to benefit from an increase in the share for leasing relative to direct container purchases by our customers, and a continued high leasing deal share for Triton."

"The start of the fourth quarter typically marks the end of the peak season for dry containers, and net container pick-up and drop-off activity has turned negative. New container prices have also decreased to the $1,700 range due to a combination of lower steel prices and aggressive competition among the container manufacturers for limited slow-season orders. However, our long-term lease portfolio provides significant insulation from seasonal variation, and our utilization currently stands at 97.6%."

"Triton continues to use our strong and stable cash flow to create shareholder value. We ordered $1.5 billion of containers for delivery in 2018, leading to 8.8% growth in revenue earning assets. We returned $2.01 per share to investors in 2018 through our dividend program, and we have so far repurchased 2.1 million shares under the share repurchase plan authorized in August 2018."

Outlook

Mr. Sondey continued, "We are carrying significant financial momentum into 2019 and expect that we will have another year of strong performance, continued value-added growth and a further extension of our market leadership. While the ongoing trade dispute between the United States and China has increased trade and economic uncertainty, our customers and market forecasters generally expect global containerized trade growth to remain solidly positive in 2019. The inventory of available used leasing containers also remains very tight and we expect our shipping line customers to continue to rely heavily on leasing."

"The first quarter is typically our weakest quarter of the year since it represents the depth of the slow season for dry containers and has the fewest number of billing days. As a result, we expect our Adjusted net income will decrease from the fourth quarter of 2018 to the first quarter of 2019. After the first quarter, we expect our adjusted income to increase moderately throughout the year as leasing demand improves seasonally."

For earnings history and earnings-related data on Triton International Limited (TRTN) click here.

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