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TAL International Group, Inc. Message Board

  • jerseyvinny3 jerseyvinny3 Apr 25, 2013 10:04 AM Flag

    What is this?

    Higher earnings, higher dividend and the stock gets taken down 5%. Is that what they mean by sell on the news?

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    • The dividend is considered retrun of capital.

    • The conference call is oing on right now . . . must not be going well.

      • 2 Replies to the_quarry
      • I just read the transcript to the conference call. As you said, it may have been a broader issue, however, there is some info in the conference call that may give some pause. TAL did benefit from 3 "events" in their earnings.

        First, there was a $2.5m gain from one customer who lost 1,400 containers. This was largely expected as I remember them discussing this on the last quarterly call, i.e., they were expecting the customer to make this declaration and now they have. This, obviously is a one time event. Secondly, the earnings increased becuase they changed the way they account for depreciation. They benefited by $4.9m. This is not a one time event and, I beelieve, will perculate through the earnings for years (although diminishing significantly each year) until all of the units on the old depreciation schedule conclude. Third, the earnings were impacted by a change to when they start accounting for the depreciation. This was a $1.6m benefit. This is also not a one time event , but should only affect earnings for a year on the quarter-to-quarter comparisons.

        However, they also reported some positive news as well - revenue up, utilization up, used container prices up, anda further lowering of thier interest rates.

        So, at first glance, on a gut reaction, some may have seen the 3 events as having a disproportionate, non-ongoing benefit and were selling. I think on Q-to-Q basis this might be true, but it doesn't really affect the long term prospects of the company, nor its future earnings. The stock has recovered a lot the loss already as these items are digested. They are making good money now ans have a great dividend. Can you imagine what it might be like when shipping acutally picks up as the economy recovers?

      • The concert call was fine, not sure why the sell off occurred, but it also was in TGH and CAP, all container stocks.

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