Trinity Industries (NYSE: TRN) reported Q4 EPS of $0.19, $0.06 worse than the analyst estimate of $0.25. Revenue for the quarter came in at $735 million versus the consensus estimate of $702.12 million.

• Successfully completed tax-free spin-off of Arcosa, Inc. to Trinity shareholders
• Reported earnings from continuing operations per common diluted share of $0.19 compared with $3.37 in the same quarter of last year
  • EPS for the fourth quarter of 2018 included a one-time non-cash charge of $12.6 million, or $0.07 per share, associated with the write-off of assets held under capital leases in the Railcar Leasing and Management Services Group ("Leasing Group")
  • EPS for the fourth quarter of 2017 included a one-time $3.03 per share benefit related to the effects of the Tax Cuts & Jobs Act (the "Tax Act")
• Leasing Group improved lease fleet utilization to 98.5% as of December 31, 2018, compared with 97.6% as of September 30, 2018
• Lease fleet increased to 99,215 units in the wholly-owned and partially-owned lease fleet as of December 31, 2018
• Rail Products Group reported railcar orders and deliveries of 8,045 and 5,285, respectively, during the fourth quarter of 2018, compared to railcar orders and deliveries of 3,180 and 6,150, respectively, during the same period last year
• Rail Products Group reported total railcar backlog of $3.6 billion at December 31, 2018, compared to $2.2 billion at December 31, 2017
• Repurchased approximately 12.9 million shares at a cost of $280.0 million under the Company's previously announced accelerated share repurchase program

“The year 2018 was an exciting and transformative year for Trinity Industries on a number of fronts, and our enthusiasm for long-term growth opportunities continues into 2019,” said Timothy R. Wallace, Trinity’s Chairman, CEO, and President. “The successful separation of Trinity into two public companies positions us to focus our resources on serving the railcar industry through the TrinityRail integrated platform of products and services.”

Mr. Wallace continued, "Railcar fundamentals improved throughout 2018, increasing demand for leased railcars and new railcar equipment. During 2018, our commercial services team was highly successful renewing leases on railcars within our fleet. Our lease fleet utilization at the end of 2018 was 98.5% or 170 basis points above the level at the end of 2017. The commercial services team received orders for 28,795 railcars in 2018, compared to 12,900 railcar orders received in 2017, a 123% increase.”

“At the beginning of 2019, our railcar order backlog totaled approximately $3.6 billion compared to approximately $2.2 billion at the start of 2018, a 69% increase. Currently our customers are providing us inquiries requesting quotes for new railcars, yet they don’t appear to have a strong sense of urgency to issue orders. We have experienced this situation in the past when there are levels of uncertainty within the economy. The recurring revenue from our leased railcar portfolio and strong order backlog provide a solid foundation for our operations and support our expectations for improvements in our financial performance this year. Our earnings guidance for 2019 reflects a range of improvement of 64 and 93% year over year. We are enthusiastic about the long-term growth opportunities to enhance shareholder value.”

GUIDANCE:

Trinity Industries sees FY2019 EPS of $1.15-$1.35, versus the consensus of $1.28.

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