Trinity Industries Stock Slides On Q1 Miss, Downbeat FY22 Outlook

  • Trinity Industries Inc TRN reported first-quarter FY22 revenue growth of 42.9% year-over-year to $472.7 million, missing the consensus of $491 million.
  • Adjusted EPS improved to $0.03 from $0.01 in 1Q21, missing the consensus of $0.16.
  • Adjusted operating profit declined 5.5% Y/Y to $48.4 million, and margin contracted by 524 bps to 10.2%.
  • Adjusted EBITDA increased 1.1% Y/Y to $117.2 million, and margin fell by 1,025 bps to 24.8%.
  • Trinity Industries' net cash provided by operating activities – continuing operations was $28.5 million, compared to $69.3 million in 1Q21, and free cash flow stood at $47.8 million.
  • Trinity Industries had liquidity of $718 million as of March 31, 2022. It held cash and equivalents of $143.2 million.
  • Lease fleet utilization was 96.5%, and Future Lease Rate Differential was positive at 2.4% at quarter-end.
  • New railcar orders of 5,055 vs. 1,410 in 1Q21 and railcar deliveries of 2,470 (+30.3% Y/Y).
  • "Trinity's first-quarter results are highlighted by strong orders and deliveries evidenced by a book-to-bill ratio of 2.0x in the quarter. Though labor and supply chain challenges persist, we are confident that deliveries in 2022 will be strong and represent a broad-based industrial recovery for North America," stated CEO Jean Savage.
  • FY22 Outlook reaffirmed: Trinity Industries expects EPS of $0.85 - $1.05, versus the consensus of $1.12.
  • It expects Industry deliveries of 40,000 - 50,000 railcars, net investment in the lease fleet of $450 million - $550 million.
  • Price Action: TRN shares are trading lower by 8.09% at $28.13 on the last check Wednesday.
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