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Rail News: Financials

Trinity Industries increases quarterly revenue, but rising raw material prices reduce income

Yesterday, Trinity Industries Inc. reported second-quarter revenue of $548.7 million and net income of $3.6 million, a 50 percent and 3 percent increase, respectively, compared with second-quarter 2003. However, the quarterly report included an after-tax loss provision of $3.1 million because of steel and component cost increases.

As of June 30, the company's North American rail-car backlog reached 17,500 units, a 65 percent increase compared with the end of second-quarter 2003.

For the year's first six months, Trinity reported a net loss of $7.2 million compared with an $11 million net loss in first-half 2003. Revenue totaling $1 billion increased 53 percent compared with similar 2003 data.

"The combined revenues and operating profit for our rail manufacturing and leasing businesses increased year-over-year 65 percent and 135 percent, respectively," said Trinity Chairman, President and Chief Executive Officer Timothy Wallace in a prepared statement.

The company is addressing raw material costs and availability that have hampered production and reduced margins this year, said Wallace.

"By the end of 2004, we expect we will have absorbed approximately $37 million of additional material cost increases that were not passed on to customers due to fixed-price barge and rail contracts," he said. "Since we are raising our prices on sales orders and negotiating escalation clauses into our sales agreements, our exposure to fixed-price contracts diminishes each quarter and is expected to be substantially reduced in 2005."

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More News from 8/5/2004