A month has gone by since the last earnings report for Triton International . Shares have added about 10.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Triton due for a pullback? 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 drivers.
Triton International Q4 Earnings Beat
Triton's earnings of $1.70 per share surpassed the Zacks Consensus Estimate of $1.42. Moreover, the bottom line surged 58.9% year over year owing to strong leasing demand and higher sale prices for used containers. Post the coronavirus-induced slump, the company saw a strong rebound in operations in the second half of 2020 with global containerized trade volumes “well above pre-pandemic levels”. This surge in trade volumes was due to easing coronavirus-led restrictions in the United States and Europe, and a favorable shift in consumer spending.
Total leasing revenues of $337.3 million missed the Zacks Consensus Estimate of $350.5 million but inched up 1.8% year over year with 2.6% rise in revenues from operating leases. Equipment trading revenues of $27.40 million climbed 59.7% from the year-ago quarter’s reported figure. Trading margin came in at $6.98 million compared with $2.27 million in the prior-year quarter.
The company generated a return on equity of 22.9% in the reported quarter compared with 14.6% in the year-ago quarter. Total operating expenses dipped approximately 2% to $172.32 million.
The company exited the fourth quarter with average utilization of 98.1%, up 200 basis points sequentially. The company repurchased 1.4 million shares during the fourth quarter. For the full year, it repurchased 5.1 million shares. Since the inception of the share-buyback plan cleared in August 2018, the company has bought back more than 13.9 million shares.
Outlook
Triton anticipates the first quarter of 2021 to benefit from “near-maximum utilization and a large number of new containers going on-hire as they are produced”. However, fewer revenue days and reduction in the number of used container disposals are expected to hurt the current quarter’s performance. For the first quarter, the company estimates adjusted earnings per share to be either flat or increase slightly from the fourth quarter of 2020.
Anticipating the surge in container demand to continue, Triton expects adjusted earnings per share to be much higher in 2021 than that in 2020.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 13.33% due to these changes.
VGM Scores
At this time, Triton has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Triton has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Triton (TRTN) Up 10.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Triton International . Shares have added about 10.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Triton due for a pullback? 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 drivers.
Triton International Q4 Earnings Beat
Triton's earnings of $1.70 per share surpassed the Zacks Consensus Estimate of $1.42. Moreover, the bottom line surged 58.9% year over year owing to strong leasing demand and higher sale prices for used containers. Post the coronavirus-induced slump, the company saw a strong rebound in operations in the second half of 2020 with global containerized trade volumes “well above pre-pandemic levels”. This surge in trade volumes was due to easing coronavirus-led restrictions in the United States and Europe, and a favorable shift in consumer spending.
Total leasing revenues of $337.3 million missed the Zacks Consensus Estimate of $350.5 million but inched up 1.8% year over year with 2.6% rise in revenues from operating leases. Equipment trading revenues of $27.40 million climbed 59.7% from the year-ago quarter’s reported figure. Trading margin came in at $6.98 million compared with $2.27 million in the prior-year quarter.
The company generated a return on equity of 22.9% in the reported quarter compared with 14.6% in the year-ago quarter. Total operating expenses dipped approximately 2% to $172.32 million.
The company exited the fourth quarter with average utilization of 98.1%, up 200 basis points sequentially. The company repurchased 1.4 million shares during the fourth quarter. For the full year, it repurchased 5.1 million shares. Since the inception of the share-buyback plan cleared in August 2018, the company has bought back more than 13.9 million shares.
Outlook
Triton anticipates the first quarter of 2021 to benefit from “near-maximum utilization and a large number of new containers going on-hire as they are produced”. However, fewer revenue days and reduction in the number of used container disposals are expected to hurt the current quarter’s performance. For the first quarter, the company estimates adjusted earnings per share to be either flat or increase slightly from the fourth quarter of 2020.
Anticipating the surge in container demand to continue, Triton expects adjusted earnings per share to be much higher in 2021 than that in 2020.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 13.33% due to these changes.
VGM Scores
At this time, Triton has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Triton has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.