Trinity Industries Reports Q3 2013 Earnings
Trinity Industries (a Conrad Industries competitor; previously mentioned) reported its Q3 2013 earnings:
"The Inland Barge Group reported revenues of $136.4 million compared to revenues of $166.5 million in the third quarter of 2012. Operating profit for this Group was $23.8 million in the third quarter of 2013 compared to $26.9 million in the third quarter of 2012. The decrease in revenues and operating profit compared to last year was due to lower delivery volumes of hopper barges partially offset by higher delivery volumes of tank barges delivered during the third quarter of 2013. The Inland Barge Group received orders of $48.8 million during the quarter, and as of September 30, 2013 had a backlog of $476.0 million compared to a backlog of $563.6 million as of June 30, 2013."Hmm, the inland barge group was less profitable in 2013 than in 2012. Backlog down 15%. From the management comments:
"Our Inland Barge Group experienced a year-over-year decline in both revenue and profit. However, as a result of manufacturing leverage in the production of tank barges, the segment produced a stronger operating margin of 17.4% during the quarter."Tank barges have had a long run.
3 comments:
Cass Freight Index: Shipments (YoY Growth)
You'd think the goal for a "strong" and "reslient" recovery would be to keep it above the population's growth rate in 2013. Oh, well. Sigh.
It becomes increasingly difficult to decide when to unload CNRD. It continues to trade at a meaningful discount to its true value. Capital allocation (with diviends and share buyback) has become investor-friendly. And there is still some m&a possibility. But it's still a cyclical business. Supply/demand turns without giving us a warning. I wanted to buy and forget (oops, I mean "buy and hold". But knowing CNRD is vulnerable to oversupply stops me from being complacent here... Thoughts?
CNRD is getting pretty ripe. A $240 million market cap. The enterprise value must be close to $200 million now. It's trading for 5-6 times a possible normalized EBITDA, plus we are getting closer to the end of the business cycle.
More importantly, there should be a chance to buy it back for $30 someday.
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