Trinity Industries, Inc. reported results for the 2016 third quarter ending September 30, with a net income of $84.2 million compared to $204.3 million in the 2015 third quarter. The company reported earnings per common diluted share of $0.55 compared to $1.31 in last year’s third quarter. Revenues for the quarter totaled $1.11 billion compared to $1.54 billion for the same quarter of 2015.
"Trinity’s financial results for the third quarter reflect reductions in year-over-year production volumes and product mix changes in our railcar and barge manufacturing businesses," stated Trinity Chairman, CEO and President Timothy R. Wallace. “Oversupply of railcars and barges in the North American market, combined with generally weak industrial demand drivers, continues to impact new order volumes. Our Construction Products Group and wind towers business performed well during the quarter."
"During the quarter, our railcar leasing operations generated solid results; however, total segment revenues and profitability decreased year-over-year as we did not conduct any sales of leased railcars," added Wallace.
In the third quarter of 2016, the Rail Group reported revenues of $720.8 billion compared to revenues of $1,073.4 million in the 2015 third quarter. Operating profit for the group in the third quarter was $103.6 million compared to last year’s operating profit of $223.3 million. The decrease in revenues and profit was primarily due to lower railcar deliveries and changes in product mix.
The Rail Group shipped 6,595 railcars and received orders for 1,260 railcars during the third quarter. The group had a backlog of $3.7 billion as of September 30, 2016, representing 34,870 railcars, compared to a backlog of $4.29 billion as of June 30, 2016, representing 40,205 railcars.
The Railcar Leasing and Management Services Group reported revenues of $173.7 million for the 2016 third quarter compared to revenues of $249.2 million during the 2015 third quarter.
Railcar operating profit for this group was $80.5 million in the 2016 third quarter compared to an operating profit of $158.2 million last year. The decrease in revenues and operating profit was primarily due to the absence of sales of leased railcars from the lease fleet during the third quarter of 2016.
Trinity Industries anticipates the first half of 2017 earnings per common diluted share will be between $0.45 and $0.60 compared to first half 2016 earnings of $1.25 per share, with first half 2016 earnings including $0.21 per share from sales of leased railcars. Trinity also assumes significant year-over-year volume reductions in its railcar and barge manufacturing businesses. At this time, based on the level of order inquiries and scheduled backlog production, the Rail Group expects first half 2017 deliveries to be approximately 7,000 to 8,000 railcars compared to first half 2016 deliveries of 13,210.
"Our outlook for 2017 reflects year-over-year volume reductions in our railcar and barge manufacturing businesses as weak demand conditions are expected to persist. In this environment, we are focused on maintaining a strong cash position and liquid balance sheet which provide stability as we manage through what we anticipate could be a prolonged downturn for certain areas of our business,” concluded Wallace.