Trinity Industries (NYSE: TRN) reported Q3 EPS of $0.21, $0.14 better than the analyst estimate of $0.07. Revenue for the quarter came in at $459 million versus the consensus estimate of $486.28 million.

Financial and Operational Highlights — Third Quarter 2020

• Quarterly total company revenues of $459 million
• Quarterly income from continuing operations per common diluted share ("EPS") of $0.21 and quarterly adjusted EPS of $0.17, which excludes the following:
  • Restructuring activities totaling $0.03 per common diluted share
  • Additional income tax benefit of $0.07 per common diluted share related to carryback claims as permitted under recent tax legislation
• Both year-to-date cash flow from operations and free cash flow before leasing investment were $457 million, respectively
• Year-to-date investment of $310 million in leasing capital expenditures, net of railcar sales, predominantly for growth
• Total committed liquidity of $719 million as of September 30, 2020
• Repurchases of approximately 4.5 million shares at a cost of $89.9 million
• Year-to-date returns to shareholders of $193 million through dividends and share repurchases
• Announces new $250 million share repurchase authorization approved subsequent to quarter-end
• Completed a new $155.5 million securitization under an existing indenture bearing interest at 1.96% annually to replace $153.1 million of secured railcar equipment notes bearing interest at 3.82%, which were redeemed
• Previously announced date of 2020 Investor Day on November 19, 2020

“In the wake of the challenges created by the COVID-19 pandemic, I applaud the commitment of Trinity’s people to deliver high-quality products and services to our customers and continue our progress in effecting the transformation of the Company’s rail-focused operating strategy,” said Jean Savage, Trinity’s CEO and President. “Trinity’s third quarter performance reflects solid execution against numerous headwinds including competitive pricing, declining deliveries, and difficult decisions in rightsizing our operations. Through it all, Trinity’s rail platform, which generates significant cash flow, and our strong balance sheet have enabled us to manage through the current environment from a position of strength.”

“Railcar loadings rebounded during the third quarter from the historical declines earlier in the year resulting from economic shutdowns amid the coronavirus outbreak. However, market uncertainty continues to cloud demand for railcars as much of the economy remains under pressure. We continue to see a good pipeline of inquiries for available railcars – new and existing – from strategic buyers and owners of railcar assets, and we remain cautiously optimistic regarding the trajectory of demand heading into next year. Average lease rates and the utilization of our lease fleet remained essentially flat from the second quarter, while lease rate renewal pricing continued to experience negative headwinds. Rail manufacturing received orders for 2,000 railcars during the third quarter, composed primarily of larger, complex transactions that leverage the strength of Trinity’s rail platform and our ability to tailor solutions for our customers.”

“Our business leaders are taking additional actions to optimize our operating structure and our balance sheet. During the third quarter, Trinity transitioned its U.S. logistics business and outsourced these services to third-party providers, as well as completed the realignment of its organizational structure. The Company also completed the $350 million share repurchase authorization, our second such completion in the past two years, with the purchase of approximately $90 million during the quarter. Earlier this week, Trinity’s Board approved a new $250 million share repurchase authorization that runs through the end of 2021.”

Ms. Savage concluded, “As we move forward with the execution of our long-term strategy, we have redefined our purpose to ‘Delivering Goods for the Good of All.’ We are proud of the essential role our railcars play in sustaining our communities, and our strategic initiatives are aimed at enhancing the rail industry's modal advantage while improving our returns on the business. We are strongly committed to accelerating the financial performance of the Company and unlocking value for our shareholders through a disciplined capital allocation framework.”

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