What's in Store for Triton (TRTN) This Earnings Season?

Triton International LimitedTRTN is slated to release third-quarter 2018 results on Nov 2, before the market opens.

Last reported quarter, the company delivered a positive earnings surprise of 3.8%. Moreover, the bottom line improved significantly year over year owing to a lower effective tax rate among other factors. Although revenues climbed 17% year over year on 17.7% growth in revenues from operating leases, the metric missed the Zacks Consensus Estimate.

However, the Zacks Consensus Estimate for third-quarter earnings has been revised 3.4% downward in the last 90 days.

Let's see how things shape up for this announcement.

Factors Likely at Play

Going by the past two quarters' performance, finance lease revenues are expected to decline in the third quarter as well, hampering top-line growth in turn. However, partly offsetting this negativity, strong operating lease revenues are anticipated to boost the top line.

Additionally, the company's high debt levels raise concerns. This is evident from the company's long-term debt-to-equity (expressed as a percentage) ratio of 312.2, comparing unfavorably with the industry average of 146.4.

Further, expenses pertaining to the company's aggressive investment initiatives in new containers might affect its bottom-line growth in the to-be-reported quarter. However, this adversity is anticipated to be partly mitigated by lowered tax rates, which should boost Triton's earnings.

Meanwhile, strong demand for the company's containers and favorable market conditions are expected to drive growth in the quarter under discussion.

Triton International Limited Price and EPS Surprise

Triton International Limited Price and EPS Surprise | Triton International Limited Quote

Earnings Whispers

Our quantitative model does not conclusively show that Triton is likely to beat on earnings in the third quarter because a company needs the right combination of the two key ingredients - a positive Earnings ESP and a Zacks Rank #3 (Hold) or better - to increase the odds of an earnings surprise. However, that is not the case as highlighted below.

Earnings ESP : Triton has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.12 per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank : Triton carries a Zacks Rank of 3, which increases the predictive power of ESP. However, the company's 0.00% ESP complicates the surprise prediction.

We caution against the Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Investors interested in the broader Transportation sector may consider Genesee & Wyoming, Inc. GWR , ArcBest Corporation ARCB and Hertz Global Holdings, Inc HTZ as these stocks possess the right combination of elements to come up with an earnings beat in their next releases.

Genesee & Wyoming has an Earnings ESP of +0.65% and is a Zacks #3 Ranked player. The company is set to report third-quarter earnings on Oct 30.

ArcBest has an Earnings ESP of +5.04% and sports a Zacks Rank #1 (Strong Buy). The company is scheduled to report third-quarter financial numbers on Nov 1. You can see the complete list of today's Zacks #1 Rank stocks here .

Hertz Global has an Earnings ESP of +13.48% and a Zacks Rank #2 (Buy). The company will report third-quarter earnings performance on Nov 8.

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Triton International Limited (TRTN): Free Stock Analysis Report

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ArcBest Corporation (ARCB): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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