Total company revenue for Trinity Industries (NYSE: TRN) grew 16 percent to $736 million in the second quarter amid revenue gains for its rail product group.
Operating profit for the railcar lessor and manufacturer rose to $107 million in the second quarter of 2019 compared with $88 million in the second quarter of 2018, Trinity said on July 24. Reported quarterly earnings from continuing operations per common diluted share rose by 21 percent to 29 cents from 24 cents in the same period a year ago.
But a $28.2 million income loss due to discontinued operations caused second quarter net income to total $36.8 million, compared with $65.5 million in the second quarter of 2018.
However, Trinity leadership said it was pleased with its renewed focus to become a leading railcar manufacturer and lessor. Railcar orders and deliveries in the second quarter totaled 2,105 and 5,255, respectively, which resulted in a total railcar backlog of $2.9 billion at the end of the quarter, Trinity said.
Second quarter revenue for Trinity’s rail products group rose to $712.3 million, compared with $566.2 million in the second quarter of 2018. Revenue from Trinity’s railcar leasing and management services group totaled $277.1 million in the second quarter of 2019, compared with $213.4 million in the comparable year-ago period.
“Trinity’s second quarter results reflect the benefits of the integrated rail platform, producing valuable recurring revenues from our growing lease fleet and profiting from a healthy level of new railcar production,” said Trinity chief executive officer Timothy R. Wallace.
“Economic headlines continued to impede railcar demand momentum during the quarter. There were a number of transactions in the market for new railcars during the second quarter where the economic terms did not align with the financial criteria we have established. Our commercial decisions resulted in a lower level of railcar orders for the quarter. Fortunately, we did not have a large need for orders in the second half of the year. At this point, we expect to deliver at least 35 percent more railcars in the second half of the year compared to the first half of the year,” Wallace said.
He continued, “Our leasing company has been successful renewing and reassigning leases to maintain a high level of utilization. Our railcar manufacturing business delivered 17 percent more railcars sequentially during the second quarter. They also benefited from a more favorable product mix and better pricing.”
Wallace also stated, “Trinity’s shift towards being a rail-focused organization is an exciting transformation for the company. Trinity has significant potential to drive returns higher through disciplined growth of our integrated rail platform while returning substantial capital to shareholders. We expect to continue making progress on our financial goals over the next few years through various levers within our control – operational improvements throughout the business, optimizing our cost structure and balance sheet, high-return investments in our railcar lease fleet and adding value-added services to our platform of businesses.”