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Triton's (TRTN) Q1 Earnings Miss Estimates, Q2 Outlook Bleak

Zacks Equity Research
·3 mins read

Triton International Limited’s TRTN first-quarter 2020 earnings (excluding 1 cents from non-recurring items) of 93 cents per share missed the Zacks Consensus Estimate of $1.03. The bottom line also declined 21.85% year over year. Results were hurt by low demand for new containers due to drop in exports from China due to the coronavirus pandemic. Further, quarterly revenues of $321.5 million declined 6.7% year over year due to 5.3% fall in revenues from operating leases.

Equipment trading revenues of $15.38 million plunged 13.7% from the year-ago quarter’s figure. Trading margin came in at $1.93 million compared with $3.58 million in the prior-year quarter.

Triton International Limited Price, Consensus and EPS Surprise

 

Triton International Limited Price, Consensus and EPS Surprise
Triton International Limited Price, Consensus and EPS Surprise

Triton International Limited price-consensus-eps-surprise-chart | Triton International Limited Quote

 

The company generated a return on equity of 13.1% in the reported quarter compared with 17.2% in the year-ago quarter. Total operating expenses inched up to $179.4 million.

Liquidity

This Zacks Rank #2 (Buy) company exited the first quarter with average utilization of 95.4%, down 40 basis points sequentially. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company repurchased 1.4 million common shares during the first quarter. Also, it repurchased an additional 0.7 million common shares through Apr 17 under the share repurchase update. Triton's Board of Directors increased the share repurchase authorization to $200.0 million. Moreover, the board announced a quarterly cash dividend of 52 cents per share, payable on Jun 25, to its shareholders of record as of Jun 11.

Q2 Outlook

The company’s second-quarter 2020 performance is likely to be affected by weak economic and trade activity due to the global economic slowdown from COVID-19. Thanks to this, profitability in the second quarter is likely to decline sequentially. Moreover, Triton’s profitability from the second quarter through the end of 2020 will depend on how rapidly the global economy and trade volumes recover from COVID-19 shocks.

Sectorial Snapshot So far

Despite challenges, there are a few companies in the Zacks Transportation sector like CSX Corporation CSX, Union Pacific Corporation UNP and Canadian Pacific Railway Limited’s CP that have beaten earnings estimates in first-quarter 2020.

CSX reported first-quarter 2020 earnings of $1 per share, which beat the Zacks Consensus Estimate of 92 cents. However, the bottom line slipped approximately 2% year over year due to a decline in revenues.

Union Pacific’s first-quarter 2020 earnings of $2.15 per share surpassed the Zacks Consensus Estimate of $1.86. Moreover, the bottom line increased 11.4% on a year-over-year basis.

Canadian Pacific’s first-quarter 2020 earnings (excluding $1.08 from non-recurring items) of $3.3 (C$4.42) per share surpassed the Zacks Consensus Estimate of $2.86. Quarterly earnings surged more than 55% year over year.

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