Trinity Industries Earnings Preview

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Investors braced for a bumpy ride ahead of Trinity Industries' (NYS: TRN) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Wednesday, Feb. 15. Trinity Industries manufactures and sells railcars and railcar parts, inland barges, structural wind towers, concrete and aggregates, asphalt, highway products, and structural steel components.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Trinity Industries, with five of seven rating it a buy and the remainder rating it a hold. Analysts like Trinity Industries better than competitor GATX overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $863.1 million in revenue this quarter. That would represent a rise of 32.4% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.42 per share. Estimates range from $0.38 to $0.44.

What our community says:
CAPS All-Stars are solidly supporting the stock, with 99.7% giving it an "outperform" rating. The community at large backs the All-Stars, with 97.1% assigning it a rating of "outperform." Fools are bullish on Trinity Industries and haven't been shy with their opinions lately, logging 363 posts in the past 30 days. Trinity Industries has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Trinity Industries' profit has risen year over year by an average of more than threefold over the past five quarters. The company's gross margin shrank by 4.3 percentage points in the last quarter. Revenue rose 47.6% while cost of sales rose 55.9% to $638.5 million from a year earlier.

Now let's look at how efficient management is at running the business. Margins illustrate how efficiently a company captures portions of sales dollars. The company's gross margins have been decreasing year over year for the last four quarters. Gross margins reflect the total sales revenue retained after costs. Here is how Trinity Industries has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

19.9%

20.1%

21.1%

19.2%

Operating Margin

13.2%

13.4%

13.3%

12.4%

Net Margin

4.0%

4.2%

3.8%

2.7%

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Earnings estimates provided by Zacks.

At the time this article was published

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