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Textainer (TGH) Gears Up for Q2 Earnings: A Beat in Store?

Zacks Equity Research

We expect Textainer Group Holdings Limited TGH to beat expectations when it reports second-quarter 2019 results on Aug 6, after the closing bell. The Zacks Consensus Estimate is 32 cents for second-quarter earnings and $146.5 million for revenues.

In the last reported quarter, this Hamilton, Bermuda-based lessor of intermodal containers surpassed the consensus mark for earnings by 50% due to higher revenues.

As far as earnings surprises are concerned, the company has a mixed record. Textainer outpaced the Zacks Consensus Estimate twice in the trailing four quarters. This is depicted in the graph below.

Textainer Group Holdings Limited Price and EPS Surprise

Textainer Group Holdings Limited Price and EPS Surprise

Textainer Group Holdings Limited price-eps-surprise | Textainer Group Holdings Limited Quote

Let’s delve deeper and find out the factors likely to impact Textainer’s second-quarter 2019 results.

Despite the U.S.-China trade war-related uncertainties, we expect shipping volumes to be impressivein the quarter to be reported. Notably, factors like high utilization, a stable container resale environment, favorable new container prices are likely to support the company’s results in the second quarter.

Additionally, an increase in the average rental rate of the fleet is expected to aid lease revenues in the to-be-reported quarter. Also, general and administrative expenses are expected to decrease due to the reduction in professional fees, which might lead to solid earnings growth. This apart, lower container impairment expenses are expected to boost the company’s bottom line. However, higher depreciation expenses might hurt second-quarter 2019 results.

What Does the Zacks Model Say?

Our proven model shows that Textainer is likely to beat earnings estimates in second-quarter 2019 as it has the right combination of two key ingredients. A stock needs to have both — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Textainer has an Earnings ESP of +6.25%.

Zacks Rank: Textainer carries a Zacks Rank of 3.You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Investors interested in the broader Transportation sector can also check out stocks like Frontline Ltd. FRO, Seaspan Corporation SSW and Hertz Global Holdings HTZ as these possess the right combination of elements to come up with an earnings beat in their next releases.

Frontline has an Earnings ESP of +400.03% and a Zacks Rank #3. The company is scheduled to report second-quarter 2019 earnings on Aug 30.

Seaspan has an Earnings ESP of +12.68% and a Zacks Rank of 2. The company will announce second-quarter 2019 results on Aug 6.

Hertz Global has an Earnings ESP of +120.23% and a Zacks Rank #3. The company is slated to release second-quarter 2019 earnings numbers on Aug 6.

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Textainer Group Holdings Limited (TGH) : Free Stock Analysis Report
 
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