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Trinity Industries (TRN) Q1 Earnings: What’s in the Cards?


Dallas, TX-based Trinity Industries Inc. TRN is a provider of products and services to the energy, transportation, chemical, and construction sectors across the globe. The company is scheduled to report first-quarter 2017 results on Apr 25, after market close.

In the fourth quarter of 2016, the company had posted a positive earnings surprise of 15.79%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 12.94%. Let’s see how things are shaping up for this announcement.

Factors Likely at Play

The company’s first-quarter results are expected to be hurt primarily by weak market conditions as well as weak demand for railcars. High costs and adverse foreign currency movement may also hamper the company’s top line.

The Rail Group segment, which recorded disastrous results in the fourth quarter, is expected to continue its poor run in the first quarter as well. Also, the Inland Barge Group might also come up with a below-par performance in the first quarter, mainly due to lower barge deliveries.

On the brighter side, the Construction Products Group of the company might perform well in the first quarter. Segmental results are likely to be aided by its construction aggregates and highway products operations. Moreover, Trinity stands to benefit from a favorable financial position. Notably, we are pleased by the company’s efforts to reward shareholders through dividend payments.

Earnings Whispers

Our proven model does not conclusively show that Trinity Industries is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here, as elaborated below.

Zacks ESP: Trinity Industries has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 28 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Trinity Industries carriesa Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP complicates our surprise prediction.

Note that we caution against stocks with Zacks Ranks #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Investors interested in the transportation space may consider the following stocks. This is because our model shows that these companies too possess the right combination of elements to post an earnings beat this quarter.

American Airlines Group AAL has an Earnings ESP of +7.55% and a Zacks Rank #3. The company will report first-quarter results on Apr 27.

Air Lease AL has an Earnings ESP of +1.16% and a Zacks Rank #3. The company will report first-quarter results on May 4. You can see the complete list of today’s Zacks #1 Rank stocks here.

C.H. Robinson CHRW has an Earnings ESP of +2.50% and a Zacks Rank #3. The company will report first-quarter results on Apr 25.

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