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Trinity's (TRN) Shares Decline 6% Since Q1 Earnings Release

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Trinity Industries TRN reported lower-than-expected first-quarter 2022 results on Apr 27, following which its shares declined approximately 6%.

The company’s adjusted earnings of 3 cents per share missed the Zacks Consensus Estimate of 16 cents. Results were hurt by supply chain disruptions and labor shortages.

Total revenues of $473 million also fell short of the Zacks Consensus Estimate of $603 million. However, the top line increased year over year due to higher external deliveries in the Rail Products Group.

The Railcar Leasing and Management Services Group (before eliminations) generated revenues of $183.1 million, nearly flat year over year. Segmental revenues were hurt by lower average lease rates and reduced lease fleet size.

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 $391.1 million, up 50% year over year. Higher delivery volumes boosted segmental revenues. Segmental operating profit was $0.8 million compared with a loss of $8.8 million in the year-ago period.

The All Other Group (primarily includes results of highway products business) did not generate revenues in the fourth quarter.

During the first quarter, Trinity rewarded its shareholders with $19.1 million in dividends. The company did not repurchase shares in the quarter. Free cash flow generated during the period was $48 million.

Trinity, carrying a Zacks Rank #4 (Sell), exited the March quarter with cash and cash equivalents of $143.2 million compared with $167.3 million at the end of December 2021.

Debt totaled $5,227.5 million as of Mar 31, 2022, compared with $5,170.6 million at the end of 2021.

2022 Outlook

Trinity expects industry deliveries of 40,000-50,000 railcars in 2022. Net investment in lease fleet is estimated to be $450-$550 million. The company anticipates manufacturing capital expenditures of $35-$45 million in 2022. Earnings per share are forecast to be 85 cents-$1.05 in 2022. The Zacks Consensus Estimate for the same stands at $1.14.

Sectorial Snapshot

Within the broader Transportation sector, Delta Air Lines DAL and J.B. Hunt Transport Services JBHT recently reported first-quarter 2022 results.

Delta, carrying a Zacks Rank #2 (Buy), incurred a loss (excluding 25 cents from non-recurring items) of $1.23 per share in the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of $1.28. With Omicron hampering travel plans in the early part of first-quarter 2022, the carrier incurred a loss after reaping profits in the last two quarters of 2021. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Delta’s first-quarter revenues came in at $9,348 million, which not only beat the Zacks Consensus Estimate of $9,063.5 million, but also soared in excess of 100% from the year-ago figure. The uptick in air-travel demand in the United States can be gauged from the fact that 80.5% of first-quarter 2022 passenger revenues came from domestic markets.

J.B. Hunt, carrying a Zacks Rank #3 (Hold), reported first-quarter 2022 earnings of $2.29 per share, which surpassed the Zacks Consensus Estimate of $1.91. The bottom line surged 67.2% year over year on higher revenues across all segments.

J.B. Hunt’s first-quarter operating revenues of $3,488.6 million also outperformed the Zacks Consensus Estimate of $3,260.5 million. The top line jumped 33.3% year over year. Total operating revenues, excluding fuel surcharges, rose 27.4% year over year.


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