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Trinity's (TRN) Q1 Earnings Miss Estimates, Decline Y/Y
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Trinity Industries’ (TRN - Free Report) first-quarter 2020 earnings of 11 cents per share (excluding $1.22 from non-recurring items) missed the Zacks Consensus Estimate of 14 cents. Moreover, the bottom line plunged 54.2% year over year.
However, total revenues of $615.2 million surpassed the Zacks Consensus Estimate of $478.5 million. The top line also inched up 1.7% year over year on higher volume of railcars.
Until third-quarter 2018, Trinity reported through five segments, namely, Rail Group, Construction Products Group, Inland Barge Group, Energy Equipment Group, and Railcar Leasing and Management Services Group. Post the completion of a spin-off transaction with its infrastructure-related businesses (Acrosa) on Nov 1, 2018, the company primarily reports via the three segments of Railcar Leasing and Management Services Group, Rail Products Group and All Other Group.
Trinity Industries, Inc. Price, Consensus and EPS Surprise
The Railcar Leasing and Management Services Group generated revenues of $236.3 million, up 17.9% year over year. The upside was primarily owing to growth in lease fleet, higher volume of railcars sold and favorable average lease rates.
Segmental operating profit summed $92.9 million, up 8.3% from the year-ago figure on higher profits from sale of railcars and lease fleet growth. Moreover, the company’s lease fleet came in at 103,815 units as of Mar 31, 2020. The fleet size grew 2.8% from the March 2019 figure.
Revenues at the Rail Products Group (before eliminations) totaled $509.4 million, down 18.9% from the prior-year number. Segmental operating profit was $25.1 million compared with $47.1 million a year ago. The decline in revenues and operating profit was due to low railcar deliveries and reduced operational efficiency. Notably, the group delivered 3,705railcars and received orders for 1,970 railcars compared with 4,505and 3,000, respectively, in the year-earlier quarter.
Revenues at the All Other Group (primarily includes results of highway products business) were $63.4 million, slightly up year over year buoyed by higher demand and the resultant rise in shipping volumes at highway products operations. Segmental operating profit came in at $9.3 million, compared with $10.1 million in the first quarter of 2019.
The Zacks Rank #3 (Hold) company exited the first quarter with cash and cash equivalents of $213.2 million compared with $166.2 million at 2019-end. Meanwhile, debt totaled $4,870.2 million as of Mar 31, 2020, compared with $4,881.9 million at the end of 2019. Trinity repurchased approximately 1.9 million shares worth $35.4 million during the first quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Outlook
Although the first quarter wasn’t impacted much, Trinity expects the pandemic to affect its near-term performance. To combat the crisis, the company has cut back on non-essential expenses apart from implementing other cost-saving initiatives. It expects to reduce costs by $25-$30 million in 2020 through these endeavors.
Delta incurred a loss of 51 cents (excluding 33 cents from non-recurring items) in the March quarter, narrower than the Zacks Consensus Estimate of a loss of 72 cents. In the year-ago quarter, the company reported earnings (on an adjusted basis) of 96 cents per share. Total revenues of $8,592 million lagged the Zacks Consensus Estimate of $9,637.5 million and also declined 18% year over year.
CSX reported first-quarter 2020 earnings of $1 per share, beating the Zacks Consensus Estimate of 92 cents. However, the bottom line slipped approximately 2% year over year on a 5% drop in revenues. Total revenues of $2,855 million lagged the consensus estimate of $2,877 million owing to lower coal and other revenues.
Union Pacific’s first-quarter 2020 earnings of $2.15 per share surpassed the Zacks Consensus Estimate of $1.86. Operating revenues of $5,229 million also beat the consensus mark of $5,105.9 million. While the bottom line improved 11.4% on a year-over-year basis, primarily due to low costs, the top line declined 3% owing to sluggish freight revenues (down 3%).
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Trinity's (TRN) Q1 Earnings Miss Estimates, Decline Y/Y
Trinity Industries’ (TRN - Free Report) first-quarter 2020 earnings of 11 cents per share (excluding $1.22 from non-recurring items) missed the Zacks Consensus Estimate of 14 cents. Moreover, the bottom line plunged 54.2% year over year.
However, total revenues of $615.2 million surpassed the Zacks Consensus Estimate of $478.5 million. The top line also inched up 1.7% year over year on higher volume of railcars.
Until third-quarter 2018, Trinity reported through five segments, namely, Rail Group, Construction Products Group, Inland Barge Group, Energy Equipment Group, and Railcar Leasing and Management Services Group. Post the completion of a spin-off transaction with its infrastructure-related businesses (Acrosa) on Nov 1, 2018, the company primarily reports via the three segments of Railcar Leasing and Management Services Group, Rail Products Group and All Other Group.
Trinity Industries, Inc. Price, Consensus and EPS Surprise
Trinity Industries, Inc. price-consensus-eps-surprise-chart | Trinity Industries, Inc. Quote
The Railcar Leasing and Management Services Group generated revenues of $236.3 million, up 17.9% year over year. The upside was primarily owing to growth in lease fleet, higher volume of railcars sold and favorable average lease rates.
Segmental operating profit summed $92.9 million, up 8.3% from the year-ago figure on higher profits from sale of railcars and lease fleet growth. Moreover, the company’s lease fleet came in at 103,815 units as of Mar 31, 2020. The fleet size grew 2.8% from the March 2019 figure.
Revenues at the Rail Products Group (before eliminations) totaled $509.4 million, down 18.9% from the prior-year number. Segmental operating profit was $25.1 million compared with $47.1 million a year ago. The decline in revenues and operating profit was due to low railcar deliveries and reduced operational efficiency. Notably, the group delivered 3,705railcars and received orders for 1,970 railcars compared with 4,505and 3,000, respectively, in the year-earlier quarter.
Revenues at the All Other Group (primarily includes results of highway products business) were $63.4 million, slightly up year over year buoyed by higher demand and the resultant rise in shipping volumes at highway products operations. Segmental operating profit came in at $9.3 million, compared with $10.1 million in the first quarter of 2019.
The Zacks Rank #3 (Hold) company exited the first quarter with cash and cash equivalents of $213.2 million compared with $166.2 million at 2019-end. Meanwhile, debt totaled $4,870.2 million as of Mar 31, 2020, compared with $4,881.9 million at the end of 2019. Trinity repurchased approximately 1.9 million shares worth $35.4 million during the first quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Outlook
Although the first quarter wasn’t impacted much, Trinity expects the pandemic to affect its near-term performance. To combat the crisis, the company has cut back on non-essential expenses apart from implementing other cost-saving initiatives. It expects to reduce costs by $25-$30 million in 2020 through these endeavors.
Performance of Other Transportation Stocks
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , CSX Corp. (CSX - Free Report) and Union Pacific Corp. (UNP - Free Report) reported earnings numbers last week.
Delta incurred a loss of 51 cents (excluding 33 cents from non-recurring items) in the March quarter, narrower than the Zacks Consensus Estimate of a loss of 72 cents. In the year-ago quarter, the company reported earnings (on an adjusted basis) of 96 cents per share. Total revenues of $8,592 million lagged the Zacks Consensus Estimate of $9,637.5 million and also declined 18% year over year.
CSX reported first-quarter 2020 earnings of $1 per share, beating the Zacks Consensus Estimate of 92 cents. However, the bottom line slipped approximately 2% year over year on a 5% drop in revenues. Total revenues of $2,855 million lagged the consensus estimate of $2,877 million owing to lower coal and other revenues.
Union Pacific’s first-quarter 2020 earnings of $2.15 per share surpassed the Zacks Consensus Estimate of $1.86. Operating revenues of $5,229 million also beat the consensus mark of $5,105.9 million. While the bottom line improved 11.4% on a year-over-year basis, primarily due to low costs, the top line declined 3% owing to sluggish freight revenues (down 3%).
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Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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