Q2 Earnings Outperformers: Trinity (NYSE:TRN) And The Rest Of The Heavy Transportation Equipment Stocks

Let’s dig into the relative performance of Trinity (NYSE:TRN) and its peers as we unravel the now-completed Q2 heavy transportation equipment earnings season.

Heavy transportation equipment companies are investing in automated vehicles that increase efficiencies and connected machinery that collects actionable data. Some are also developing electric vehicles and mobility solutions to address customers’ concerns about carbon emissions, creating new sales opportunities. Additionally, they are increasingly offering automated equipment that increases efficiencies and connected machinery that collects actionable data. On the other hand, heavy transportation equipment companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the construction and transport volumes that drive demand for these companies’ offerings.

The 14 heavy transportation equipment stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility, and heavy transportation equipment stocks have had a rough stretch. On average, share prices are down 5% since the latest earnings results.

Trinity (NYSE:TRN)

Trinity Industries, Inc. (NYSE: TRN) is a provider of railcar products and services in North America, operating under the trade name TrinityRail.

Trinity reported revenues of $841.4 million, up 16.5% year on year. This print exceeded analysts’ expectations by 14%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ earnings estimates.

“Our second quarter GAAP EPS of $0.67 and adjusted EPS of $0.66 represent improvement across our business. Revenues are up 16% year over year, we generated $243 million of cash flow from continuing operations, and our LTM Adjusted ROE of 16.8% showcases the strength of our operations as well as our balance sheet,” said Trinity’s Chief Executive Officer and President, Jean Savage.

Trinity achieved the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 3.3% since reporting and currently trades at $31.94.

We think Trinity is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q2: Douglas Dynamics (NYSE:PLOW)

Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE:PLOW) offers snow and ice equipment for the roads and sidewalks.

Douglas Dynamics reported revenues of $199.9 million, down 3.6% year on year, outperforming analysts’ expectations by 9.4%. It was an incredible quarter for the company with an impressive beat of analysts’ earnings estimates.

The market seems content with the results as the stock is up 4.5% since reporting. It currently trades at $27.60.

Is now the time to buy Douglas Dynamics? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Microvast (NASDAQ:MVST)

With over 25 patents, Microvast (NASDAQ:MVST) designs, develops, and manufactures lithium-ion batteries for electric vehicles and batteries for renewable energy storage.

Microvast reported revenues of $83.68 million, up 11.6% year on year, falling short of analysts’ expectations by 4.4%. It was a weak quarter for the company with a miss of analysts’ earnings estimates.

As expected, the stock is down 21.8% since the results and currently trades at $0.31.

Read our full analysis of Microvast’s results here.

Cummins (NYSE:CMI)

With more than half of the heavy-duty truck market using its engines at one point, Cummins (NYSE:CMI) offers engines and power systems.

Cummins reported revenues of $8.80 billion, up 1.8% year on year, surpassing analysts’ expectations by 5.3%. Zooming out, it was a very strong quarter for the company with a decent beat of analysts’ earnings estimates.

The stock is up 4.9% since reporting and currently trades at $306.

Read our full, actionable report on Cummins here, it’s free.

Blue Bird (NASDAQ:BLBD)

With around a century of experience, Blue Bird (NASDAQ:BLBD) is a manufacturer of school buses and complementary parts.

Blue Bird reported revenues of $333.4 million, up 13.3% year on year, surpassing analysts’ expectations by 2%. Zooming out, it was a strong quarter for the company with an impressive beat of analysts’ earnings estimates.

Blue Bird had the weakest full-year guidance update among its peers. The stock is down 3.1% since reporting and currently trades at $47.01.

Read our full, actionable report on Blue Bird here, it’s free.

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