Trinity Industries Issues Weak Outlook For 2016; Shares Plunge 11% - Quick Facts

(RTTNews) - Trinity Industries, Inc. (TRN) announced, for the full year of 2016, the company anticipates earnings per share of between $2.00 and $2.40. The Group expects revenues of approximately $3.1 billion with an operating margin of approximately 15% in 2016. Analysts polled by Thomson Reuters expect the company to report profit per share of $3.64 on revenue of $5.80 billion. Analysts' estimates typically exclude special items.

The company said its guidance reflects a change in product mix and pricing compared to 2015 for the Group's 2016 railcar deliveries; a decrease in operating leverage related to an approximate 20% reduction in expected volumes; and costs associated with aligning the Group's production footprint with demand. For the Rail Group, annual deliveries in 2016 are now expected to be approximately 27,000 railcars, reflecting the delivery of firm backlog and a lower anticipated level of new orders.

Timothy Wallace, Trinity's CEO stated: "Our outlook for 2016 reflects the weakening in the industrial economy that began broadly impacting our businesses late last summer. In this environment, we are placing a high priority on cost containment and various initiatives to enhance our performance. We will continue to reposition and streamline our manufacturing operations as business conditions fluctuate."

Trinity Industries noted that its 2016 earnings guidance assumes the current weak market conditions will continue throughout the year. Shares of the company were down more than 11% after hours on Thursday.

The company expects to continue expanding the RIV platform in 2016. Proceeds from the sale of leased railcars are expected to be approximately $500 million with a profit of approximately $100 million.