Thursday, April 29, 2010

Trinity Industries 1Q report notes increased backlog for Rail Group

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Trinity Industries, Inc. late Wednesday reported first-quarter revenue of $454.0 million, down from $793.5 million for the samequarter of 2009. Net income of $2.0 million, or $0.07 per common diluted share, included pretax transaction expenses related to the acquisition of Quixote Corp. that totaled $4.3 million. Net income for the same quarter of 2009 was $33.9 million, or $0.43 per common diluted share.

The company noted that its Rail Group had revenue of $73.6 million with an operating loss of $7.9 million in the first quarter, compared with revenue of $283.9 million and an operating loss of $5.8 million in the year-ago period. And one Wall Street analyst noted that the company’s earnings per share beat analyst expectations.

Trinity said its railcar backlog had increased during the quarter compared to the fourth quarter of 2009. As of March 31, TrinityRail’s order backlog totaled approximately $250 million, representing approximately 2,980 railcars, compared with a backlog of approximately $195 million, representing approximately 2,320 railcars at December 31, 2009. TrinityRail shipped approximately 500 railcars and received orders for approximately 1,150 railcars during the first quarter.

“We were encouraged during the first quarter by the orders we received in our rail, barge, and structural wind towers businesses that increased their backlogs since year-end, as well as the continued improvement in the utilization of our railcar lease fleet,” said Timothy R. Wallace, Trinity’s chairman, CEO, and president. “We were pleased during the first quarter to complete the acquisition of Quixote Corporation and the integrationis going very smoothly. We maintained strong liquidity during the first quarter, with $522.8 million in unrestricted cash and short-term marketable securities which contributed to a total liquidity of $1.2 billion at March 31, 2010.”

Steve Barger, director, Industrial Manufacturers, for KeyBanc Capital Markets, Inc., said the company’s optimism was justifiable. “In our view, TRN continues to execute very well through the downturn, and we continue to believe its diversified business model will allow it to stay EPS [earnings-per-share] positive through this cycle. Of note, TRN enjoyed its first positive book-to-bill ratio in its Rail Group “since the second quarter of 2008,” Barger wrote.