Trinity Industries (TRN) Tops Q1 EPS by 4c, Revenues Miss; Offers FY19 EPS Mid-Point Guidance Below Consensus

Trinity Industries (NYSE: TRN) reported Q1 EPS of $0.24, $0.04 better than the analyst estimate of $0.20. Revenue for the quarter came in at $604.8 million versus the consensus estimate of $674.92 million.

• Reported quarterly earnings from continuing operations per common diluted share ("EPS") of $0.24, an increase of 167% year over year
• Reported quarterly revenues from leasing and management services of $187.1 million with a 41.2% operating profit margin
• Leasing Group grew the wholly-owned and partially-owned lease fleet to 101,005 units, bringing the total net book value of the lease fleet (before deferred profit) to $7.2 billion
• Leasing Group reported lease fleet utilization of 98.4%
• Reported Rail Products Group quarterly revenues of $603.6 million and an 8.4% operating profit margin
• Rail Products Group reported total railcar backlog of $3.3 billion
• Rail Products Group reported quarterly railcar orders and deliveries of 3,000 and 4,505, respectively
• Repurchased approximately 3.5 million shares at a cost of $89.0 million, including the completion of the Company\'s previously announced $350 million accelerated share repurchase program
• Put a new $350 million share repurchase authorization in place for 2019-2020
• Increased quarterly dividend to $0.17 per common share, an increase of 31%
• Successfully executed a $528.3 million secured railcar financing transaction subsequent to quarter-end

“Trinity is off to a good start in 2019 with significant improvement in year over year earnings per share and quarterly revenue growth across our business segments,” said Timothy R. Wallace, Trinity’s Chief Executive Officer and President. “We are making great progress in enhancing shareholder value. I am pleased with the level of capital the Company has recently returned to shareholders. This includes a 31% increase in the company’s quarterly dividend announced in March 2019 and the completion of the previously announced $350 million accelerated share repurchase program. In addition, we announced another share repurchase authorization of $350 million that expires in December 2020. Recently during the second week of April, we made further progress in optimizing the balance sheet with a very successful $528 million leased railcar securitization at a coupon rate of 3.82%.”

Mr. Wallace continued, “Trinity’s businesses performed well during the quarter. Currently, the general sense of economic uncertainty within our commercial markets shows signs of improvement. Our Leasing business maintained a strong level of utilization, increased its operating margin during the quarter, and grew its wholly and partially-owned lease fleet by 9% year over year. During the first quarter, our Rail Products team changed over a number of production lines while delivering a higher operating margin relative to the fourth quarter. The highway products business had a good first quarter despite several severe weather-related events that affected the timing of a number of highway construction projects. Overall, we continue to expect earnings growth of approximately 60-90% year over year for 2019. I continue to be very excited about focusing our resources on growing and improving TrinityRail’s integrated platform of products and services, as well as the strength and enthusiasm I see within our organization.”

GUIDANCE:

Trinity Industries sees FY2019 EPS of $1.15-$1.35, versus the consensus of $1.31.

• For the full year 2019, the Company continues to anticipate earnings of between $1.15 and $1.35 per common diluted share, an increase of 64% to 93% as compared to 2018.
• Additionally, the Leasing Group expects a net lease fleet investment of between $1.2 billion and $1.4 billion in 2019.
• At this time, the Rail Products Group expects full year 2019 deliveries of between approximately 23,500 and 25,500 railcars.

For earnings history and earnings-related data on Trinity Industries (TRN) click here.

You May Also Be Interested In

• Nanometrics (NANO) Issues Business Update, Reports FY23 Results
• Ball Corporation (BALL) Raises Dividend, Enters 40M Share Buyback, Announces Management Changes
• ATN International (ATNI) Misses Q1 EPS by 46c ; Offers Guidance