Q3 Rundown: Trinity (NYSE:TRN) Vs Other Heavy Transportation Equipment Stocks
As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at heavy transportation equipment stocks, starting with Trinity (NYSE:TRN).
Heavy transportation equipment companies are investing in automated vehicles that increase efficiencies and connected machinery that collects actionable data. Some are also developing electric vehicles and mobility solutions to address customers’ concerns about carbon emissions, creating new sales opportunities. Additionally, they are increasingly offering automated equipment that increases efficiencies and connected machinery that collects actionable data. On the other hand, heavy transportation equipment companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the construction and transport volumes that drive demand for these companies’ offerings.
The 14 heavy transportation equipment stocks we track reported a mixed Q3. As a group, revenues missed analysts’ consensus estimates by 1.2%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Trinity (NYSE:TRN)
Operating under the trade name TrinityRail, Trinity (NYSE:TRN) is a provider of railcar products and services in North America.
Trinity reported revenues of $798.8 million, down 2.7% year on year. This print exceeded analysts’ expectations by 14.8%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ backlog and EPS estimates.
“Trinity’s third quarter results once again exhibit strong performance for our business. Year to date, we have generated $384 million in net cash from operating activities, and our LTM Adjusted ROE improved to an impressive 18.3%,” said Trinity’s Chief Executive Officer and President, Jean Savage.
Trinity Total Revenue
Trinity achieved the biggest analyst estimates beat of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $35.83.
With more than half of the heavy-duty truck market using its engines at one point, Cummins (NYSE:CMI) offers engines and power systems.
Cummins reported revenues of $8.46 billion, flat year on year, outperforming analysts’ expectations by 1.8%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates.
Cummins Total Revenue
The market seems happy with the results as the stock is up 8.6% since reporting. It currently trades at $353.85.
With its first trailer reportedly built on two sawhorses, Wabash (NYSE:WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods.
Wabash reported revenues of $464 million, down 26.7% year on year, falling short of analysts’ expectations by 2.8%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
The stock is flat since the results and currently trades at $17.12.
Offering the first full-electric North American fire truck, REV (NYSE:REVG) manufactures and sells specialty vehicles.
REV Group reported revenues of $597.9 million, down 13.8% year on year. This print came in 0.9% below analysts' expectations. Taking a step back, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EBITDA estimates but full-year revenue guidance missing analysts’ expectations significantly.
The stock is up 6.5% since reporting and currently trades at $31.51.
Having designed the industry’s first double-decker railcar in the 1980s, Greenbrier (NYSE:GBX) supplies the freight rail transportation industry with railcars and related services.
Greenbrier reported revenues of $1.05 billion, up 3.5% year on year. This result was in line with analysts’ expectations. Zooming out, it was a satisfactory quarter as it also logged an impressive beat of analysts’ EPS estimates but a significant miss of analysts’ sales volume estimates.
The stock is up 22% since reporting and currently trades at $62.78.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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