Trinity Industries Inc. TRN is scheduled to release fourth-quarter 2016 results after the market closes on Feb 16.
In the third quarter, the company had posted a positive earnings surprise of 5.77%. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters with an average beat of 14.37%.
Shares ofTrinity Industries have lagged the Zacks categorized Transportation-Equipment & Leasing industry in the last six months, primarily due to challenging market conditions. Shares of the company have returned 19.1% compared with the industry, which gained 25.14% in the period.
Challenges are likely to stay in the fourth quarter as well. Our quantitative model too does not call for an earnings beat in the final quarter of 2016. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. Unfortunately, this is not the case here, as elaborated below.
Zacks ESP: Trinity Industries has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 38 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank:Trinity carries a Zacks Rank #2. However, that alone is not enough to secure an earnings beat.
Factors Likely at Play
The company’s fourth-quarter results are expected to be hurt primarily by weak market conditions. Also, soft demand for railcars is likely to hurt the company’s results in the fourth quarter. Adverse foreign currency movement may also hamper the company’s top line.
The Rail Group segment, which recorded disastrous results in the third quarter, should continue its poor run in the fourth quarter as well. Lower volumes and product mix changes are expected to hurt segmental results. The multi-million-dollar lawsuit against the company is another concern.
However, we are pleased by the company’s strong balance sheet and efforts to reduce costs. In addition, Trinity Industries’ efforts to reward shareholders also impresses.
Trinity Industries, Inc. Price and EPS Surprise
Trinity Industries, Inc. Price and EPS Surprise | Trinity Industries, Inc. Quote
Stocks to Consider
Here are some transportation companies to consider, as our model shows that these also have the right combination of elements to post an earnings beat this quarter.
LATAM Airlines Group S.A. (LFL) has an Earnings ESP of +36.36% and a Zacks Rank #2. The company, which is expected to release fourth-quarter results on Mar 14, has outshined the Zacks Consensus Estimate in two of the last four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here .
Navigator Holdings Ltd. (NVGS) has an Earnings ESP of +75% and a Zacks Rank #3. The company, which is expected to release fourth-quarter results on Mar 6, has outpaced the Zacks Consensus Estimate in two of the last four quarters.
Golar LNG Ltd. (GLNG) has an Earnings ESP of +5.41% and a Zacks Rank #3. The company, which is expected to release fourth-quarter results on Mar 6, has seen its stock price appreciate over 40% in the last six months.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 “”Strong Buy”” stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 “”Strong Sells”” and other private research. See these stocks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
LATAM Airlines Group S.A. (LFL): Free Stock Analysis Report
Trinity Industries, Inc. (TRN): Free Stock Analysis Report
Golar LNG Limited (GLNG): Free Stock Analysis Report
Navigator Holdings Ltd. (NVGS): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research