For Trinity, ‘2025 Performance Will Demonstrate the Strength of Our Platform,’ Savage Says

For fourth-quarter 2024, Trinity reported company revenue of $629.4 million, down 21% from the prior-year period’s $797.9 million. It attributed this to “lower external deliveries, including sustainable railcar conversions, in the Rail Products Group.” Additionally, quarterly income from continuing operations per common diluted share (EPS) came in at $0.38; adjusted, it was $0.39.

Operating profit for fourth-quarter 2024 was $112 million, down 25% from fourth-quarter 2023’s $148.7 million, reflecting “lower gains on lease portfolio sales and higher employee-related costs, including incentive-based compensation, as well as lower external deliveries in the Rail Products Group, partially offset by improved efficiencies in the Rail Products Group,” Trinity reported.

Rail Products Group revenue came in at $526.3 million in fourth-quarter 2024, dipping 14% from $612.3 million in 2023. The company said this reflects “lower deliveries, including sustainable railcar conversions.” In the three-months ending Dec. 31, 2024, the Group delivered 3,760 railcars; received orders for 1,500 railcars, valued at $191.1 million; and had a backlog value of $2.1 billion. This compares with fourth-quarter 2023’s 4,000 railcars delivered; 840 railcars ordered, valued at $156.1 million; and a backlog value of $3.2 billion.

For the Railcar Leasing and Services Group, revenue was $287.1 million in fourth-quarter 2024, down 3% from the prior-year period’s $278.1 million. The company attributed this to “higher lease rates and net additions to the lease fleet.” Lease fleet utilization came in at 97.0% vs. fourth-quarter 2023’s 97.5%. The Future Lease Rate Differential (FLRD) was positive 24.3% at the end of fourth-quarter 2024 vs. positive 23.7% for the prior-year period, representing “continued strength in current lease rates,” Trinity noted.

Following are highlights of Trinity’s full-year 2024 financial and operational results:

• Total company revenue came in at $3.1 billion, vs. $3.0 billion for full-year 2023. The company attributed this to “higher volume of external repairs and higher lease rates in the Leasing Group and higher external deliveries, partially offset by a lower volume of sustainable railcar conversions in the Rail Products Group.”
• EPS was $1.81. Adjusted EPS was $1.82, with a $0.44 improvement year-over-year.
• Cash flow from continuing operations was $588 million and net gains on lease portfolio sales was $57 million.
• Return on Equity (ROE) was 13.3%; adjusted, it was 14.6%.
• Railcar deliveries came in at 17,570; backlog was $2.1 billion at year-end.

“Trinity Industries’ 2024 full-year adjusted EPS of $1.82 represents a 32% increase over 2023, driven by higher lease rates, significantly improved margin performance, and a higher volume of external repairs,” Jean Savage said. “I extend my gratitude to the Trinity team for their outstanding efforts this year.

“We ended the year with an Adjusted ROE of 14.6%, within our target range. Furthermore, our cash flow from operations metric, which includes net gains on lease portfolio sales, was $645 million, up 65% over 2023.

“In our Railcar Leasing and Services Group, we concluded the year with a 10% year-over-year revenue increase. 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, evidenced by our FLRD of 24.3%. 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.”

2025 Guidance

Looking ahead, Trinity reported that it expects industry deliveries of approximately 35,000 railcars in 2025. Additionally, this year it would have a net fleet investment of $300 million to $400 million; operating and administrative capital expenditures of $45 million to $55 million; and EPS of $1.50 to $1.80, “exclud[ing] items outside of our core business operations.”

“At our 2024 Investor Day, we emphasized that a less volatile operating environment combined with the reduced cyclicality of our platform will optimize our returns through the cycle,” Savage said. “In 2025, we expect industry deliveries of 35,000, approximately a 20% decrease from 2024 as uncertainty around tariffs is delaying investment decisions.”

“We are introducing our full-year 2025 EPS guidance of $1.50 to $1.80,” Savage continued. “This guidance range reflects continued leasing revenue improvement, consistent operating margins, lower deliveries, and a higher proportion of deliveries to our lease fleet with slightly lower gains on lease portfolio sales in support of our net fleet investment targets. We believe that our 2025 performance will demonstrate the strength of our platform and our ability to generate strong returns and consistent margin performance.”