Trinity Industries (TRN) Q4 Earnings: A Beat In The Cards?

Trinity Industries, Inc. (NYSE:TRN) is scheduled to report fourth-quarter 2017 results on Feb 21, after market close.

Last quarter, the company delivered a positive earnings surprise of 34.4%. Trinity Industries has also surpassed the Zacks Consensus Estimate for earnings in each of the last four quarters, with an average beat of approximately 15.9%.

Notably, the stock’s impressive earnings history is well reflected in its robust price performance in a year’s time. While Trinity Industries has rallied 20.5%, the Zacks Equipment and Leasing industry gained 2.3%.

Factors Likely at Play

Trinity Industries’fourth-quarter results are anticipated to be aided by an impressive performance from its Railcar Leasing and Management Services Group unit. Increased sales of leased railcar sales and higher asset management advisory fees are expected to boost the segment.

Additionally, the company’s efforts to reward shareholders through dividends and share buybacks are encouraging. An update on the issue is expected on fourth-quarter conference call. Also, Trinity might hike its dividend payout, particularly with the advent of the new tax law, which should aid the company significantly. An update on its plans to spin off the infrastructure-related business is also anticipated on the same conference call.

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

What Does Our Model Indicate?

Our proven model shows that Trinity Industries is likely to beat on earnings in the fourth quarter. This is because the stock has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase its odds of an earnings surprise.

Zacks ESP: Trinity Industries has an Earnings ESP of +1.59% as the Most Accurate estimate of 43 cents is a penny higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Trinity Industries carries a Zacks Rank #3, which when combined with a positive ESP, makes us confident of an earnings beat.

Conversely, we caution against stocks with a 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 stocks worth considering from the broader Zacks Transportation sector may also check out the following companies with the right combination of elements to beat estimates in the next releases:

Atlas Air Worldwide Holdings (NASDAQ:AAWW) has an Earnings ESP of +0.48% and a Zacks Rank #2 (Buy). The company will report fourth-quarter financial numbers on Feb 22. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Copa Holdings, S.A. (NYSE:CPA) has an Earnings ESP of +1.84% and a Zacks Rank #3. The company is scheduled to release fourth-quarter results on Feb 21.

LATAM Airlines Group S.A. (NYSE:LTM) is a Zacks #2 Ranked player. The company has an Earnings ESP of +13.64% and is slated to announce fourth-quarter earnings results on Mar 14.

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