Looks to me as though the after hours trade down 2% occurred before the earnings release.
Here are the time stamps:
NASDAQ After Hours: 16:30 $ 44.2405 High 776
First news story on Yahoo:
American Railcar Industries, Inc. Reports Strong Quarterly Earnings and ShipmentsGlobeNewswire(Wed 4:44PM EDT)
So it appear somebody made a very small downwards trade about 14 minutes before earnings release. 776 shares at $44.24 = $34,330. I'm guessing it wasn't Carl Icahn.
I think the guardrail litigation provides us with the opportunity to buy Trinity at a rock-bottom price. Were it not for that uncertainty, share price might be much higher.
Congratulations on your work experience at ARII--I am nearly retired, after working in an unrelated field, and have to scrounge through public documents in order to glean little snippets of information about railcars.
Trinity VP said in conf call we are in "an extended railcar cycle"....
Steve Menzies - Senior Vice President, Group President of TrinityRail Inc.
......During the second quarter, the industry received orders for approximately 20,000 railcars and maintained a steady level of backlog. TrinityRail received orders for 11,170 railcars, increasing our backlog to 59,830 railcars with a value of $6.9 billion. We received orders for open top hoppers, covered hoppers of varying capacities, box cars, auto racks, flat cars and tank cars reflecting broad market demand for a wide variety of railcar types.
The diversity of these orders reflects demand beyond the energy sector. Activity in the upstream energy markets propelled the railcar industry out of the last downturn and generated a robust level of demand for the last several years. More recently, the demand environment has shifted away from this catalyst and is now supported by increased activity in the downstream petrochemical markets, as well as the agriculture, construction, consumer and automotive markets.
The rotation in current railcar market demand drivers toward these broad markets, combined with increased replacement needs for an aging fleet of general purpose freight cars, supports our view of an extended railcar cycle..................
I wrote this comment on Seeking Alpha:
A few background statistics, in case there might be anybody out there who is actually interested in Trinity Industries.....
There are 1.5 million freight cars in North America, according to Railway Age. Their average age is 20 years-old, which implies a 40-year lifespan. Regulations state that they can be used 50 years before requiring a major overhaul, but the useful lifespan is often shorter because of technologic obsolescence--e.g. larger tank cars, double-stacked container transporters, electronic brakes, thick-hulled tankers. Anyway, to refresh the fleet every 40 years requires about 1.5 million/40=37,500 new car orders annually. Greenbrier says that the long term average annual order rate is 50,000 cars, which suggests the fleet must be growing larger with time.
There were 67,383 deliveries of new cars in 2014, and a projected 83,000 deliveries throughout all of 2015. That means we are in record territory for new railcar orders this year, and many analysts say, without any proof, that we are at the cyclical peak.
If railcar orders plummet, Trinity profits will plunge, unless they have a huge backlog, which is a 2-year backlog in the actual case. But if railcar orders taper down over many years to a low of, say, 20,000 new cars per year, Trinity will be scarcely affected. The Railcar Manufacturing industry has published their projection, which is for a slow decline of orders over many years. I believe this is a rosy scenario for Trinity and Greenbrier.
CSX carloadings are improved, and intermodal markedly improved, compared with week #28, and compared with quarter-to-date figures. Even coal slightly improved. Intermodal rates are rising because truck freight rates are rising. Two highest rated RR's for customer satisfaction CSX and BNSF. Many articles about Chinese investors buying U.S. assets, dumping gold, and dumping Chinese stocks. paying $841,000 for homes in Texas, on average. Wonder if they will buy RR stocks, or if they prefer momentum stocks? CSX share price is pretty cheap @$31, but not for too long.
I agree with you it would make sense to repurchase shares, considering the P/E is only $29/4.6=6.3x. Management said in the conf. call that they wanted to use cash flow to pay down high interest rate debt, but I think they'll run out of that pretty soon. Maybe they could buy in some of the convertible debt.
Actually, railcar sales are up approximately 30% compared with last years. Railcar orders are down, but still near record levels. 2015 is predicted to be the strongest year ever for railcar sales. Google search: RSI: Rail-car backlog shrank in second quarter
S&P Capital IQ's J. Corridore predicted a price target of $64 last year at this time, now he's predicting $30. He used a 16x multiple last year, and now he uses a 7x multiple. How accurate do you suppose his predictions are?
July 30, 2014
10:15 am ET ... S&P CAPITAL IQ KEEPS STRONG BUY OPINION ON SHARES OF
TRINITY INDUSTRIES (TRN 46.76*****):We raise our '14 EPS estimate by $0.20 to
$4.01 and lift our 12-month target price by $9, to $64, valuing the shares at 16X our
'14 estimate, in line with the company's 3-year historical P/E range, and in the
middle of TRN's historical P/E range. TRN Q2 EPS of $1.01 vs. $0.52 beat our $0.80
estimate, and reflected 39% rev. growth and 95% EPS growth over the prior year.
The company saw growth in railcar sales, railcar leasing, barge and energy
products, with operating margin improvement across all sectors. Despite the
strong growth, railcar backlog grew by $300 mil. to $5.5 bil. /J. Corridore
Yahoo has market cap=$1.41 billion, and EBIDTA $328 million, at today's price of $53.5. That means shares are trading at only 4.3x EBIDTA today. Seems a tad on the low side.
Stifel estimates are very pessimistic compared with others. Mr. Baudendistel needs to explain why he is so low compared with the two large consulting firms, EPA Associates and FTR Associates.
Railcar Delivery estimates (thousands)
. 2015.. 2016..2017
STIFEL . 84.....74.....64
FTR Associates 90.... 88.... .76
EPA Associates 85.... 80.5..75.8
Stifel estimates published in Research Note
FTR estimates displayed on graph in Greenbrier's May 2015, Investor Day Presentation, slide#7
EPA estimates from March 2015 Railway Age article
(Links are posted on my Seeking Alpha comment on the GBX Board. Can't post links on Yahoo).
Plunging railcar manufacturer share prices might make you think railroad traffic has plunged. That's false, it's only down about 1% YTD.
From the Am Assn of RR:
"For the first 23 weeks of 2015, U.S. railroads reported cumulative volume of 6,384,231 carloads, down 3.4 percent from the same point last year; and 6,052,558 intermodal units, up 2.3 percent from last year. Total combined U.S. traffic for the first 23 weeks of 2015 was 12,436,789 carloads and intermodal units, a decrease of 0.7 percent compared to last year,"
Wouldn't you think that some of the excitement surrounding CSX would blow over to NSC? They're both small Class 1 RR's, and could easily be acquired by the giants, if STB would consent.
Isn't the problem for Norfolk Southern that coal shipments are down due to natural gas substitution in power plants? And the first quarter GDP growth of 0.2% means fewer goods were transported by rail than analysts assumed? Not clear to me how this is a management deficiency.