Trinity Industries Up 4% As Q1 Results Top Estimates, Rosy Outlook

(RTTNews) - Shares of Trinity Industries, Inc. (TRN) gained more than four percent in extended trading on Tuesday after the rail-car manufacturer reported results for the first quarter that topped analysts' expectations. The company also raised earnings guidance for the full-year 2014.

The company also reported a profit for the quarter that nearly tripled from last year, reflecting lower effective tax rate and strong double-digit revenue growth.

The company noted that it has been successful in extending year-over-year growth in revenue and net income since the fourth quarter of 2010.

"The Company sustained its positive momentum during the first quarter, reporting a record level of net income and EPS that exceeded prior record levels by a wide margin. During the first quarter, all of our business groups improved their results, increasing both operating profit and margin compared to the prior year," Chairman, President and CEO Timothy Wallace said in a statement.

The Dallas, Texas-based company reported record net income of $226.4 million or $2.85 per share for the first quarter, sharply higher than $79.1 million or $0.99 per share in the prior-year quarter.

Net income from continuing operations soared to $219.1 million or $2.85 per share from $77.0 million or $0.91 per share in the year-ago quarter.

On average, 11 analysts polled by Thomson Reuters expected the company to post earnings of $2.54 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter surged 57 percent to a record of $1.46 billion from $932.90 million in the same quarter last year, and topped seven Wall Street analysts' consensus estimate of $1.33 billion.

Segment-wise, rail group's revenues surged 37 percent to a record of $857 million, while revenues from inland barge group declined to $137 million from $147 million last year.

The rail group shipped 6,890 railcars and received orders for 9,625 railcars during the first quarter, resulting in a record backlog of 42,830 units with a record value of $5.2 billion.

Inland Barge Group received orders with a value of $215 million, resulting in a backlog with a value of $508 million.

Revenues from construction products group was $113 million, up from $104 million last year. Railcar leasing and management services group revenues more than tripled to $443 million from $134 million in the year-ago quarter. Energy equipment group revenues improved to $211 million from $155 million last year.

The company noted that it received total proceeds of $514 million from the sale of new and existing leased railcars to Element Financial Corp. under the company's strategic alliance formed in December 2013.

For fiscal 2014, Trinity raised its earnings guidance to a range of $7.00 to $7.50 per share from the prior forecast range of $6.30 to $7.00 per share. Street is currently looking for full-year 2014 earning of $6.87 per share.

"During the first quarter of 2014, we acquired the assets of three manufacturing companies that provide us with important competencies as we grow our presence in the energy markets. We will continue to invest resources to position our company for continued growth," Wallace added.

TRN closed Tuesday's regular trading session at $72.49, up $0.86 or 1.20% on a volume of 1.81 million shares. The stock gained a further $3.21 or 4.43% in after-hours trading.