I really hate this kind of half-a$$ clips by a Seeking Alpha news editor, who failed to cite the original source that he copied only portions of verbatim, i.e., a WSJ article by Bob Tita, who also wrote:
Railcar manufacturers still have bulging backlogs of orders for cube and tank cars. The industrywide backlog of 52,381 tank cars is enough for at least 18 months of production based on last year’s volume, while the backlog of 33,986 cube-car orders equates to 2.5 times last year’s output.
Analysts expect manufacturers to be steadfast about not allowing customers to cancel car orders.
“The manufacturers are going to be very adamant that if you ordered a car, they’ll deliver it and you’ve got to pay for it,” said Mr. Starks [Eric Starks, president of logistics consulting firm FTR Associates].
Last year’s flood of orders from the energy industry squeezed some other car users, such as chemical companies and food processors, out of the tank-car and hopper markets. Trinity Industries Inc., which makes and leases railcars, on Friday said that some of them have become buyers again.
“We see a broadening demand for our railcars,” Stephen Menzies, vice president in charge Trinity’s railcar business, said during a call with analysts. “We have received a fair number of tank car orders beyond those serving the crude-oil markets.”
Trinity’s first-quarter results easily topped expectations and the company raised its profit guidance for the year. Nevertheless, investors Friday dumped its shares, driving the stock down 14% to $28.70.
I see the TRN price drop as a buying opportunity here.
And BTW, TRN reported in their 1Q 2015 results that the Rail Group delivered a record 8,710 railcars and received orders for 4,865 new railcars during the first quarter resulting in a backlog of 57,190 units with a value of $6.81 billion.