Trinity Industries saw revenue and profit fall in the fourth quarter on fewer deliveries of new railcars and said U.S. tariffs are expected to cut industry deliveries by 20% in 2025.
For the three months ending Dec. 31, Dallas-based Trinity (NYSE: TRN) on Thursday reported revenue of $629 million, down from $798 million year over year, and operating profit of $112 million, off from $149 million.
Pretax earnings fell to $191 million from $225 million. Diluted earnings per share totaled 39 cents from 82 cents a year ago.
Trinity delivered 3,760 railcars in the quarter and recorded 1,500 new orders. Lease fleet utilization was 97% with a future lease rate differential (FLRD) of positive-24.3% at quarter’s end. The owned lease fleet was 109,635 cars, up from 109,295 y/y. Investor-owned lease cars was higher at 34,230 from 33,005.
For full-year 2024, revenue climbed to $3.1 billion from $2.9 billion on higher volume of external repairs and higher lease rates, as well as higher deliveries, partially offset by a lower volume of sustainable railcar conversions in the Rail Products Group.
Operating profit was $491.5 million, up from $417 million. Pretax earnings of $804.1 million increased from $720.1 million. Diluted earnings per share of $1.82 improved from $1.38.
“In our Railcar Leasing and Services Group, we concluded the year with a 10% year over year revenue increase,” said Chief Executive and President Jean Savage, in a release. “We have now repriced over half of our fleet in a higher rate environment while maintaining a favorable utilization rate. We expect these positive trends to continue. In the Rail Products Group, the impact of improved labor and operational efficiencies is evident with a 68% full-year improvement in profit despite relatively flat revenue performance.”
Savage said Trinity expects industry deliveries of 35,000 cars in 2025, “approximately a 20% decrease from 2024 as uncertainty around tariffs is delaying investment decisions.”
Those tariffs would mean higher prices on imported steel, aluminum and other raw materials used in railcar production, which would also affect carloads, as well as higher interest rates that are expected to damp demand.
About 90% of railcar production by American builders is located outside the U.S.
Trinity offered initial full-year earnings estimates of $1.50 to $1.80 per share.
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