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Sep 30, 2020
Trinity Q3 2020 Earnings Report
Reported solid execution against headwinds, including competitive pricing and declining deliveries.
Key Takeaways
Trinity Industries announced third-quarter results with a total revenue of $459 million. The company reported GAAP earnings per share of $0.21 and adjusted EPS of $0.17. They generated $457 million in both year-to-date operating and free cash flow before leasing investment. The company also announced a new $250 million share repurchase authorization.
Quarterly total company revenues of $459 million
Quarterly income from continuing operations per common diluted share of $0.21 and quarterly adjusted EPS of $0.17
Both year-to-date cash flow from operations and free cash flow before leasing investment were $457 million
Announced new $250 million share repurchase authorization approved subsequent to quarter-end
Trinity
Trinity
Trinity Revenue by Segment
Revenue by Segment
Railcar Leasing and Services Revenue
CapyFin.comRail Products Revenue
CapyFin.com Forward Guidance
The company anticipates that the structural and cyclical administrative cost reductions completed thus far in 2020 will generate approximately $80 million in future annualized cost savings. The pension plan is expected to be fully settled in the fourth quarter of 2020 and upon settlement, the Company currently expects to recognize a pre-tax non-cash pension settlement charge totaling between $145 million to $160 million.
Positive Outlook
- Cost optimization initiatives expected to generate $80 million in future annualized cost savings.
- Strong balance sheet enables management through the current environment from a position of strength.
- Good pipeline of inquiries for available railcars from strategic buyers and owners of railcar assets.
- Commitment of Trinity’s people to deliver high-quality products and services to our customers
- The company redefined its purpose to ‘Delivering Goods for the Good of All.’
Challenges Ahead
- Market uncertainty continues to cloud demand for railcars as much of the economy remains under pressure.
- Average lease rates and the utilization of our lease fleet remained essentially flat from the second quarter.
- Lease rate renewal pricing continued to experience negative headwinds.
- Lower deliveries in the Rail Products Group
- Competitive pricing
Revenue & Expenses
Visualization of income flow from segment revenue to net income