Triton (TRTN) Shares Gain On Q3 Earnings & Revenue Beat

Triton International Limited’s (NYSE:TRTN) third-quarter earnings per share of $1.17 surpassed the Zacks Consensus Estimate of $1.12 and also improved significantly year over year. The bottom line was boosted by a lower effective tax rate among other factors.

Quarterly revenues of $350.1 million beat the Zacks Consensus Estimate of $348.2 million. Moreover, the top line improved 15.9% year over year, primarily owing to 16.8% growth in revenues from operating leases.

Following the impressive results, shares of the company rose 3.6% at the close of business on Nov 2.

Triton International Limited Price, Consensus and EPS Surprise

Triton International Limited Price, Consensus and EPS Surprise | Triton International Limited Quote

The company generated a return on equity of 16.9% in the reported quarter as compared to 13.4% a year ago. However, total operating expenses increased 5.5% to $173.47 million.

Equipment trading revenues of $25.29 million surged more than 100% from the year-ago quarter. Trading margin in the quarter came in at approximately $5.81 million compared with $1.37 million in the year-ago period. This uptick was primarily owing to higher trading volumes.

The company exited the third quarter with utilization of 98.7% on the back of robust container pickup activity. Furthermore, the company rewarded shareholders with dividends to the tune of $41.6 million. Effective tax rate reduced to 10.3% in the third quarter from 16.8% a year ago, mainly due to the new tax law (Tax Cuts and Jobs Act). The company expects the effective tax rate to be even lower than 10% with time.

Dividend

The company’s board has announced a quarterly cash dividend of 52 cents per share, payable Dec 20 to shareholders of record as of Dec 3.

Bullish Outlook

This Zacks Rank #3 (Hold) company is anticipated to perform well in the fourth quarter on the back of tight supply/demand conditions for containers despite the seasonal sluggishness for dry containers. Moreover, trade growth is expected to remain strong next year and tariff imposition on goods traded between the United States and China is not likely to have a major impact on container trading volumes across the globe. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Investors interested in the broader Zacks Transportation sector are keenly awaiting third-quarter earnings reports from key players, namely Expeditors International of Washington, Inc. (NASDAQ:EXPD) , Air Lease Corporation (NYSE:AL) and Azul S.A. (NYSE:AZUL) . While Expeditors will release earnings numbers on Nov 6, Air Lease and Azul will announce the same on Nov 8.

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