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Trinity's (TRN) Q1 Earnings Beat Estimates, Down 36.4% Y/Y

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Trinity Industries’ TRN first-quarter 2021 earnings (excluding 4 cents from non-recurring items) of 7 cents per share surpassed the Zacks Consensus Estimate of 3 cents. However, the bottom line plunged 36.4% year over year. Following this dismal earnings performance, shares of the company fell 5.5% at the close of business on Apr 22.

Total revenues of $398.8 million surpassed the Zacks Consensus Estimate of $375.7 million but declined 35.2% year over year. Lower deliveries in the Rail Products Group and change in presentation of railcar sales hurt revenues in the quarter.

Other Details

The Railcar Leasing and Management Services Group generated revenues of $183.5 million, down 22.3% year over year. The downside was caused by lower fleet utilization and lower lease rates. Segmental operating profit declined 15.7% to $78.3 million, since fewer railcars were sold from lease portfolio during the quarter.

Trinity Industries, Inc. Price, Consensus and EPS Surprise

Trinity Industries, Inc. Price, Consensus and EPS Surprise
Trinity Industries, Inc. Price, Consensus and EPS Surprise

Trinity Industries, Inc. price-consensus-eps-surprise-chart | Trinity Industries, Inc. Quote

Revenues in the Rail Products Group (before eliminations) totaled $261 million, down 48.8% from the prior-year quarter’s number. The downside was due to lower deliveries, pricing pressures, shift in the mix of railcars sold as well as reduced railcar modification services. Segmental operating loss was $8.8 million compared with segmental operating profit of $25.1 million a year ago. The below-par results in this metric was due to lower deliveries, lower pricing and weather-related costs.

Revenues in the All Other Group (primarily includes results of highway products business) were $68.1 million, up 7.4% year over year due to increased demand for highway products. Segmental operating profit came in at $15.3 million compared with $9.3 million in the year-ago quarter.

In the first quarter of 2021, Trinity rewarded shareholders with $60 million through dividend payouts and share repurchases.

The Zacks Rank #3 (Hold) company exited the first quarter with cash and cash equivalents of $178.1 million compared with $132 million at 2020-end. Meanwhile, debt totaled $5.2 billion as of Mar 31, 2021 compared with $5.02 billion at the end of 2020.

Outlook

The company estimates cash flow from operations in the range of $625-$675 million for 2021.

Sectorial Snapshot

Within the broader Transportation sector, Delta Air Lines DAL, J.B. Hunt Transport Services JBHT and Kansas City Southern KSU recently reported first-quarter 2021 results.

Delta, carrying a Zacks Rank #3, incurred a loss (excluding $1.70 from non-recurring items) of $3.55 per share. The figure was wider than the Zacks Consensus Estimate of a loss of $3.08. Total revenues of $4,150 million topped the Zacks Consensus Estimate of $3,821.3 million.

J.B. Hunt, a Zacks #3 ranked player, reported earnings of $1.37 per share. The figure beat the Zacks Consensus Estimate of $1.18. Total operating revenues of $2,618.1 million also surpassed the Zacks Consensus Estimate of $2,486.9 million.

Kansas City Southern, carrying a Zacks Rank of 3, reported earnings (excluding 23 cents from non-recurring items) of $1.91 per share. The figure missed the Zacks Consensus Estimate of $2. Quarterly revenues of $706 million lagged the Zacks Consensus Estimate of $714.3 million.

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