A month has gone by since the last earnings report for Triton International (TRTN). Shares have lost about 7.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Triton due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat at Triton International in Q4
Triton International's fourth-quarter 2018 earnings per share (excluding 38 cents from non-recurring items) of $1.25 surpassed the Zacks Consensus Estimate of $1.14 and also improved significantly year over year.
Quarterly revenues of $355.4 million fell short of the Zacks Consensus Estimate of $359.6 million. However, the top line improved 13.2% year over year, primarily owing to 12.4% growth in revenues from operating leases.
The company generated a return on equity of 17.7% in the reported quarter as compared to 16.9% a year ago. However, total operating expenses increased 6% to $174.1 million.
Equipment trading revenues of $26.2 million surged more than 100% from the year-ago quarter. Trading margin in the quarter under review came in at approximately $6.1 million compared with $1.1 million in the year-ago period.
The company exited the fourth quarter with utilization of 98.2% on the back of impressive container pickup activity. Furthermore, the company rewarded investors to the tune of $2.01 per share in 2018 through dividends. Moreover, as of Feb 8, 2019, the company purchased 2.1 million shares under the share buyback plan cleared in August 2018. Additionally, Triton International ordered $1.5 billion of containers for delivery in 2018. Consequently, revenue earning assets increased 8.8% in the year.
Dividend
The company’s board has announced a quarterly cash dividend of 52 cents per share, payable Mar 28 to shareholders of record as of Mar 12.
Outlook
The company expects adjusted net income for the first quarter of 2019 to decrease on a sequential basis. This is because of the sluggishness, pertaining to dry containers, in the first quarter. Moreover, the January-March period has the fewest number of billing days.
Adjusted income is anticipated to increase moderately for the rest of the year, driven by the seasonal improvement in leasing demand.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Triton has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision looks promising. Notably, Triton has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Triton International Limited (TRTN): Free Stock Analysis Report
Original post