Trinity Industries Inc. rose the most in almost three months after raising its annual profit forecast because of surging demand for railcars.
Buyers are ordering more cars to haul cargo such as autos, chemicals and farm and consumer goods, helping make up for slackening sales of tankers, Senior Vice President Stephen Menzies said Friday on a conference call. Crude-by-rail shipments are cooling after oil prices plunged from a peak above $100 a barrel in June 2014.
The shift to new market segments and the “increased replacement needs for an aging fleet of general-purpose railroad cars supports our view of an extended railcar cycle,” Menzies said. Trinity is the biggest U.S. railcar maker.
Trinity boosted its full-year profit projection late Thursday, saying earnings per share would be $4.45 to $4.75. That outpaced analysts’ $4.43 average estimate and a previous range of $4.10 to $4.45.
The shares rose 5.2 percent to $27.33 at the close Friday in New York, the biggest gain since May 1. The rally pared the year-to-date decline for the Dallas-based company to 2.4 percent.
Second-quarter orders of 11,170 Trinity railcars were “well above our expectations, representing nearly 56 percent of the industry orders and above what we view to be their historical/typical share of 33 percent,” Allison Poliniak-Cusic, an analyst at Wells Fargo Securities LLC, said in a note.