Why Is Trinity Industries (TRN) Down 6.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Trinity Industries (TRN). Shares have lost about 6.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Trinity Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Earnings Miss at Trinity in Q2
TRN’s second-quarter earnings per share (EPS) of 23 cents missed the Zacks Consensus Estimate of 33 cents but improved 64.3% year over year on the back of improved operating results, partially offset by higher interest expense.
Total revenues of $722.4 million outpaced the Zacks Consensus Estimate of $613.9 million and grew 73.3% year over year. The top line was aided by a higher volume of external deliveries in the Rail Products Group.
The Railcar Leasing and Management Services Group generated revenues of $223.2 million, up 14.3% year over year. Segmental revenues were boosted by higher utilization and improved lease rates.
Revenues in the Rail Products Group (before eliminations) totaled $709 million, up 64.6% year over year. The uptick was backed by higher delivery volumes, partially offset by the mix of railcars sold. Segmental operating profit was $23.7 million compared with $13.7 million in the year-ago period. The operating profit margin grew to 3.3% from 3.2% in the year-ago reported quarter.
Trinity exited the second quarter with cash and cash equivalents of $91.7 million compared with $81.9 million as of Mar 31, 2023. Debt totaled $5,832.6 million as of Jun 30, 2023, compared with $5,707.6 million at the prior-quarter end.
During the reported quarter, TRN generated $37.8 million of net cash from operating activities. Adjusted free cash flow (after investments and dividends) was $44.6 million.
Trinity rewarded its shareholders with $22.2 million in the second quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Trinity Industries has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Trinity Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Trinity Industries belongs to the Zacks Transportation - Equipment and Leasing industry. Another stock from the same industry, Ryder (R), has gained 2.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.
Ryder reported revenues of $2.88 billion in the last reported quarter, representing a year-over-year change of -4.9%. EPS of $3.61 for the same period compares with $4.43 a year ago.
Ryder is expected to post earnings of $3.22 per share for the current quarter, representing a year-over-year change of -27.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.8%.
Ryder has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Trinity Industries, Inc. (TRN) : Free Stock Analysis Report
Ryder System, Inc. (R) : Free Stock Analysis Report
