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Actionable news in TRN: TRINITY INDUSTRIES Inc,

American Railcar Could Derail On Thursday

Summary

American Railcar reports Q1 earnings on Thursday.

Trinity's leasing revenue fell 52% Q/Q. Leasing is 13% of ARII's total revenue. It could fall rapidly as well.

ARII expects 70% of its backlog to be delivered in 2016. Is there enough in the till for 2017 to justify its current valuation?

The decline in leasing revenue and the backlog could derail ARII on Thursday.

American Railcar (NASDAQ:ARII) reports Q1 earnings on Thursday April 28th. Analysts expect revenue of $196.04 million and eps of $1.35. The revenue estimate implies a 25% decline sequentially. Investors should focus on the following key items:

Is Leasing Revenue Recurring?

The global economy has been in a steady state of decline. Efforts of central bankers have been useless. Declining rail traffic has also led to falling railcar orders. In certain cases buyers have decided to lease railcars instead of buy. Leasing allows customers an avenue to transport product cross country, yet forgo the capital outlay...


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