Triton International Limited (TRTN) Tops Q1 EPS by 13c, Revenues Miss

Triton International Limited (NYSE: TRTN) reported Q1 EPS of $1.19, $0.13 better than the analyst estimate of $1.06. Revenue for the quarter came in at $340.9 million versus the consensus estimate of $344.8 million.

Operating Performance

“Triton achieved excellent results in the first quarter of 2019," commented Brian M. Sondey, Chief Executive Officer of Triton. “We generated $92.8 million of Adjusted net income in the first quarter, or $1.19 of Adjusted net income per share, and we realized an annualized Return on equity of 17.2%.”

“Triton’s strong financial results in the first quarter were supported by our continued outstanding operating performance, and key operating metrics such as utilization and used container sale prices remained at high levels. However, new lease transaction activity and container pick-up volumes were slow throughout the first quarter and we have so far limited our purchases of new containers. The first quarter typically represents the depth of the slow season for dry containers, and this typical seasonal weakness has likely been compounded this year by increased uncertainty related to the ongoing trade dispute between the United States and China. We recently have seen some increase in lease inquiries, and new container prices have rebounded toward the $1,900 range for a 20’ dry container, but the overall pace of leasing activity has not yet shifted to typical pre-peak season levels.”

“Triton has taken a number of actions this year to drive shareholder value. We repurchased 2.6 million shares of our common stock during the first quarter at values we believe are compelling, increasing our total purchases to 5.1 million shares since last summer. In addition, we repurchased the majority of the third-party investor interests in a partnership which owns a portfolio of containers in our fleet. We also completed an inaugural issuance of perpetual preferred stock. We believe the perpetual preferred stock provides an attractive combination of risk protection and cost, and will be a valuable addition to our capital structure. Overall, our strong cash flow, unrivaled operating capabilities and range of financing options continue to give us many levers to drive shareholder value.”

Outlook

“Our customers continue to expect trade growth will be moderately positive in 2019 and we expect leasing activity will accelerate as we move deeper into the second quarter, supporting our utilization and providing more investment opportunities. However, we do not expect the one-time items benefiting the first quarter to reoccur, and we transferred a large number of containers from short-term to long-term lease with one of our major customers, which will negatively impact our leasing revenue in the near-term but lead to an attractive and more secure long-term value for the containers. Overall, we expect our Adjusted net income per share will decrease slightly from the first quarter of 2019 to the second quarter, and then increase from the second quarter through the end of the year.”

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

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