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Why Is Triton (TRTN) Up 3.2% Since Last Earnings Report?

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It has been about a month since the last earnings report for Triton International (TRTN - Free Report) . Shares have added about 3.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Triton due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Triton International Q3 Earnings & Revenues Surpass Estimates

Triton International’s third-quarter earnings per share of $1.17 surpassed the Zacks Consensus Estimate of $1.12 and also improved significantly year over year. The bottom line was boosted by a lower effective tax rate among other factors.

Quarterly revenues of $350.1 million beat the Zacks Consensus Estimate of $348.2 million. Moreover, the top line improved 15.9% year over year, primarily owing to 16.8% growth in revenues from operating leases.

The company generated a return on equity of 16.9% in the reported quarter as compared to 13.4% a year ago. However, total operating expenses increased 5.5% to $173.47 million.

Equipment trading revenues of $25.29 million surged more than 100% from the year-ago quarter. Trading margin in the quarter came in at approximately $5.81 million compared with $1.37 million in the year-ago period. This uptick was primarily owing to higher trading volumes.

The company exited the third quarter with utilization of 98.7% on the back of robust container pickup activity. Furthermore, the company rewarded shareholders with dividends to the tune of $41.6 million. Effective tax rate reduced to 10.3% in the third quarter from 16.8% a year ago, mainly due to the new tax law (Tax Cuts and Jobs Act). The company expects the effective tax rate to be even lower than 10% with time.

Dividend

The company’s board has announced a quarterly cash dividend of 52 cents per share, payable Dec 20 to shareholders of record as of Dec 3.

Bullish Outlook

The company is anticipated to perform well in the fourth quarter on the back of tight supply/demand conditions for containers despite the seasonal sluggishness for dry containers. Moreover, trade growth is expected to remain strong next year and tariff imposition on goods traded between the United States and China is not likely to have a major impact on container trading volumes across the globe.


 

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, Triton has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Triton has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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