Trinity Industries Reports Improved Year-Over-Year Growth In Revenue, Operating Profit And Earnings Per Share

Trinity Industries Inc. TRN reported third-quarter net income of $49 million and earnings per share (EPS) of $0.39, compared to net income of $27.9 million, and EPS of $0.19 for the same quarter in 2018.

The Dallas, Texas-based transportation company had revenues of $813.6 million for the third quarter of 2019, compared with revenues of $606.9 million for the same quarter in 2018. It represented an annual growth of 34%.

Trinity Industries released its third-quarter earnings report on October 23 and company executives held an earnings call on October 24.

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"Trinity's third quarter financial results significantly improved year-over-year due to the growth of our railcar lease fleet and increased deliveries of new railcars," Timothy R. Wallace, Trinity's president and chief executive officer, said during the earnings call. "The 34% increase in revenues and doubling of earnings per share reflects Trinity Rail's ability to improve our financial performance."

Trinity Industries manufactures and sells railroad cars (hopper cars, gondolas, flat cars, roll cars, intermodal cars, tank cars, etc.) and component parts. Its customers include railroads, leasing companies and shippers of products.

Trinity Industries' Railcar Leasing and Management Services Group increased its third quarter 2019 revenues and operating profit to $326.4 million and $115.7 million, compared with $227.5 million and $92.2 million, during the same quarter of 2018. 

Trinity's Rail Group received orders of 2,530 railcars with a value of $259.2 million and delivered 5,320 railcars during the third quarter of 2019, compared with orders for 7,725 railcars and deliveries of 3,990 railcars in the same quarter last year. 

Wallace said the railcar market has been affected by decreased demand due to economic uncertainty associated with industrial production and global trade issues.

"These factors, combined with pressure on railcar loading volumes, are impacting railcar lease rates and utilization as well as orders for new railcars," Wallace said during the earnings call. "Our management team has responded accordingly and is being highly selective in its originations of new railcar leases. The team has shifted a portion of new railcar production from 2019 into the first half of 2020 to facilitate the transition to lower railcar production next year."

Trinity's Rail Group expects deliveries of between 21,500 and 22,000 railcars for all of 2019. The Leasing Group now expects a net lease fleet investment of between $850 million and $950 million in 2019.

Trinity Industries total owned and managed lease fleet stands at 126,305 railcars at the end of the third quarter.

Trinity Industries officials said they expect full-year earnings to be in the range of $1.17 to $1.27 per share.

Image Sourced from Pixabay. Credit: Michael Gaida