Trinity 2Q earnings grow, as does backlog

Dallas-based Trinity Industries, Inc. Wednesday reported a second-quarter earnings of $30.0 million, or 37 cents per diluted share, up from $18.4 million, or 23 cents per diluted share, in the second quarter of 2010. Revenue of $710.5 million was up from $543.1 million for the year-ago period. Wall Street analysts expected 38 cents per diluted share, however, and shares of the company fell as much as 10% Wednesday afternoon on the New York Stock Exchange.

For the quarter, the Rail Group reported revenue of $280.7 million and an operating profit of $15.4 million, compared with revenue of $112.9 million and an operating loss of $2.7 million in the second quarter of 2010. The Rail Group shipped approximately 3,115 railcars and received orders for approximately 7,860 railcars during the second quarter. As of June 30, 2011, the Rail Group backlog grew to approximately $2.2 billion, representing approximately 27,240 railcars compared with a backlog of approximately $1.8 billion as of March 31, 2011, representing approximately 22,490 railcars.

“We continue to be encouraged by the level of demand for products in our railcar and barge businesses. This is reflected in their improving order backlogs,” said Timothy R. Wallace, Trinity’s chairman, CEO, and president. “Subsequent to quarter end, we also announced a successful refinancing of a portion of our railcar leasing company’s debt, which is important for the growth of that business.”

Also encouraged is Steve Barger, director, Industrial Manufacturers, KeyBanc Capital Markets Inc. “Given the strength of Trinity’s and the industry’s second-quarter orders, our view that industry pricing is improving, and our general thesis that railcar manufacturers enjoy significant operating leverage as volume improves, we think investors should be buyers on weakness as we continue to think TRN is on the front end of accelerating EPS as the cycle improves,” Barger said in an analyst note Wednesday.