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Trinity Industries (TRN) Down 9.9% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Trinity Industries (TRN - Free Report) . Shares have lost about 9.9% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Earnings Miss at Trinity in Q4
Trinity’s fourth-quarter 2020 earnings (excluding $1.17 from non-recurring items) of 4 cents per share missed the Zacks Consensus Estimate by a penny. Moreover, the bottom line plunged 88.6% year over year due to coronavirus-induced decrease in railcar demand.
Total revenues of $415.6 million surpassed the Zacks Consensus Estimate of $299.7 million but declined 51.2% year over year. Lower deliveries in the Rail Products Group and fewer railcars sold hurt revenues in the quarter.
Segmental Results
The Railcar Leasing and Management Services Group generated revenues of $189.3 million, down 39.6% year over year. The downside was caused by lower fleet utilization and lower lease rates on renewals. Segmental operating profit dropped 12.1% to $88.2 million since no railcar sale took place during the quarter.
Revenues in the Rail Products Group (before eliminations) totaled $313.3 million, down 65.2% from the prior-year quarter’s number. Segmental operating profit was $0.1 million compared with $96.8 million a year ago. The decline in revenues and operating profit was caused by low railcar deliveries and lower pricing.
Revenues at the All Other Group (primarily includes results of highway products business) were $55.9 million, down 7.9% year over year due to decreased demand for highway products. Segmental operating profit came in at $4.3 million against operating loss of $0.6 million in the year-ago period. Lower costs drove operating profits at this segment.
In 2020, Trinity rewarded shareholders with $285 million through dividends and share repurchases.
The company exited the fourth quarter with cash and cash equivalents of $132 million compared with $166.2 million at 2019-end. Meanwhile, debt totaled $5.02 billion as of Dec 31, 2020 compared with $4.88 billion at the end of 2019.
Outlook
Trinity anticipates earnings to improve in 2021 from the year-ago period owing to its cost-saving initiatives. However, business environment is expected to remain challenging. Owing to strong cash flow synergies, the company estimates cash flow from operations in the range of $625 million-$675 million for 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -57.14% due to these changes.
VGM Scores
Currently, Trinity Industries has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Trinity Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Trinity Industries (TRN) Down 9.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Trinity Industries (TRN - Free Report) . Shares have lost about 9.9% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Earnings Miss at Trinity in Q4
Trinity’s fourth-quarter 2020 earnings (excluding $1.17 from non-recurring items) of 4 cents per share missed the Zacks Consensus Estimate by a penny. Moreover, the bottom line plunged 88.6% year over year due to coronavirus-induced decrease in railcar demand.
Total revenues of $415.6 million surpassed the Zacks Consensus Estimate of $299.7 million but declined 51.2% year over year. Lower deliveries in the Rail Products Group and fewer railcars sold hurt revenues in the quarter.
Segmental Results
The Railcar Leasing and Management Services Group generated revenues of $189.3 million, down 39.6% year over year. The downside was caused by lower fleet utilization and lower lease rates on renewals. Segmental operating profit dropped 12.1% to $88.2 million since no railcar sale took place during the quarter.
Revenues in the Rail Products Group (before eliminations) totaled $313.3 million, down 65.2% from the prior-year quarter’s number. Segmental operating profit was $0.1 million compared with $96.8 million a year ago. The decline in revenues and operating profit was caused by low railcar deliveries and lower pricing.
Revenues at the All Other Group (primarily includes results of highway products business) were $55.9 million, down 7.9% year over year due to decreased demand for highway products. Segmental operating profit came in at $4.3 million against operating loss of $0.6 million in the year-ago period. Lower costs drove operating profits at this segment.
In 2020, Trinity rewarded shareholders with $285 million through dividends and share repurchases.
The company exited the fourth quarter with cash and cash equivalents of $132 million compared with $166.2 million at 2019-end. Meanwhile, debt totaled $5.02 billion as of Dec 31, 2020 compared with $4.88 billion at the end of 2019.
Outlook
Trinity anticipates earnings to improve in 2021 from the year-ago period owing to its cost-saving initiatives. However, business environment is expected to remain challenging. Owing to strong cash flow synergies, the company estimates cash flow from operations in the range of $625 million-$675 million for 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -57.14% due to these changes.
VGM Scores
Currently, Trinity Industries has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Trinity Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.