Open the filing on EDGARTrinity Industries, Inc. Announces First Quarter 2026 Results
Raises full year EPS guidance to a range of $2.20 to $2.40, up 16% at the midpoint from previous range of $1.85 to $2.10
Reports quarterly earnings from continuing operations of $0.32 per diluted share
Generates operating cash flow of $100 million and net gains on lease portfolio sales of $22 million
Lease fleet utilization of 97.3% at quarter-end
Delivered 1,970 railcars in the quarter; backlog of $1.6 billion at quarter-end
DALLAS, Texas - April 30, 2026 - Trinity Industries, Inc. (NYSE:TRN) today announced earnings results for the first quarter ended March 31, 2026.
Financial and Operational Highlights - First Quarter
- Quarterly total company revenues of $492 million
- Quarterly income from continuing operations per common diluted share ("EPS") of $0.32; $0.03 improvement in EPS year over year
- Lease fleet utilization of 97.3% and FLRD of positive 1.2% at quarter-end
- Railcar deliveries of 1,970 and new railcar orders of 1,660
- Cash flow from continuing operations of $100 million and net gains on lease portfolio sales of $22 million
- Last twelve months ("LTM") Return on Equity ("ROE") of 23.1% and Adjusted ROE of 24.6%
2026 Guidance
- Industry deliveries of approximately 25,000 railcars
- Net fleet investment of $350 million to $450 million
- Operating and administrative capital expenditures of $55 million to $65 million
- EPS of $2.20 to $2.40
Management Commentary
"We're pleased to raise our full-year EPS guidance to a range of $2.20 to $2.40, representing a 16% increase at the midpoint," said Trinity's Chief Executive Officer and President, Jean Savage. "This increase reflects higher gains on railcar sales driven by an active secondary market, alongside strong and consistent execution across our business."
"In our Railcar Leasing and Services segment, we're seeing continued momentum, with lease rates moving higher and fleet utilization improving to 97.3%. On April 9th, we closed the restructuring of our remaining railcar investment partnership with Napier Park, and we expect to record a non-cash gain of approximately $130 million in the second quarter."
"In the Rail Products Group, we delivered 1,970 railcars at a 7.4% operating margin, underscoring the benefits of several years of right-sizing, automation, and breakeven reduction in the business." Ms. Savage continued, "Customer inquiries have been trending upward, and we're well-positioned to meet demand when the market turns."
Ms. Savage concluded, "We did what we said we'd do in the first quarter, and we are raising our expectations for the full year based on what we see ahead. We remain focused on disciplined execution for our customers and shareholders."
Excludes items outside our core business operations
Consolidated Financial Summary
| Three Months Ended March 31, | |
|---|
| 2026 | 2025 | Year over Year - Comparison |
|---|
| ($ in millions, except per share amounts) | |
|---|
| Revenues | | $492.0 | | $585.4 | Lower external deliveries in the Rail Products Group |
| Operating profit | | $101.1 | | $99.8 | Higher gains on lease portfolio sales and higher lease rates, partially offset by higher operating costs for the lease fleet. Additionally, Q1-25 included the results of a partially-owned leasing subsidiary that was divested in Q4-25. |
| Interest expense, net | | $65.4 | | $66.1 | |
| Net income from continuing operations attributable to Trinity Industries, Inc. | | $26.0 | | $24.0 | |
| EBITDA | | $175.9 | | $179.5 | |
| Effective tax expense rate | 24.2% | | 20.3% | | |
| Diluted EPS - GAAP | | $0.32 | | $0.29 | |
| Net cash provided by operating activities - continuing operations | | $99.6 | | $78.4 | Lower receivables balances as a result of lower deliveries in the current year period and changes in inventory balances to support planned production levels |
| Cash flow from operations with net gains on lease portfolio sales | | $121.6 | | $84.3 | |
| Net fleet investment | | $67.7 | | $86.5 | |
| Returns of capital to stockholders | | $32.2 | | $32.8 | |
Non-GAAP financial measure. See the Reconciliations of Non-GAAP Measures section within this Press Release for a reconciliation to the most directly comparable GAAP measure and why management believes this measure is useful to management and investors.
Additional Business Items
- Total committed liquidity of $1.1 billion as of March 31, 2026.
- On April 17, 2026, Trinity Rail Leasing 2025 LLC ("TRL-2025"), a limited purpose, indirect wholly-owned subsidiary of the Company owned through Trinity Industries Leasing Company ("TILC"), issued an aggregate principal amount of $481 million of its Series 2026-1 Green Secured Railcar Equipment Notes (the "Series 2026-1 Notes). The Series 2026-1 Notes bear interest at an all-in interest rate of 5.36%, are payable monthly, and have a stated final maturity date of April 2056. Net proceeds received in connection with the issuance of the Series 2026-1 Notes were used to redeem the outstanding debt of Trinity Rail Leasing 2019 LLC Series 2019-1 Secured Railcar Equipment Notes (the "Series 2019-1 Notes") and for general corporate purposes. The all-in interest rate for the Series 2019-1 Notes was 3.82% per annum. The Trinity Rail Leasing 2019 LLC Series 2019-2 Secured Railcar Equipment Notes remain outstanding.
- On April 9, 2026, TILC entered into a Contribution Agreement (the “Contribution Agreement”) with, among others, Napier Park Rail Evergreen Fund LLC, a subsidiary of Napier Park Global Capital, a leading alternative credit platform. Pursuant to the Contribution Agreement, TILC contributed (i) a 42.56% membership interest in TRIP Rail Holdings LLC ("TRIP Holdings") and (ii) a 0.2% interest in Triumph Rail Holdings LLC ("Triumph") to NP SPE Holdings LP ("NP SPE") in exchange for a 11.2% limited partnership interest in NP SPE. TILC services all railcars in NP SPE.
- As a result, TILC no longer has any direct ownership interest in TRIP Holdings or Triumph.
- Trinity expects to recognize a non-cash pre-tax gain of approximately $130 million during the second quarter of 2026 from the sale of its equity stake in TRIP Holdings and Triumph.
- Approximately 6,135 railcars will be transferred from partially-owned to investor-owned related to the divestiture of TRIP Holdings in the second quarter of 2026.
Business Group Summary
| Three Months Ended March 31, | |
|---|
| 2026 | 2025 | Year over Year - Comparison |
|---|
| ($ in millions) | |
|---|
| Railcar Leasing and Services Group | |
| Revenues | | $285.8 | | $287.4 | Reduced revenues resulting from the Q4-25 divestiture of a partially-owned leasing subsidiary, partially offset by higher lease rates and higher pricing on external repairs |
| Operating profit | | $108.2 | | $104.5 | Higher gains on lease portfolio sales and higher lease rates, partially offset by higher maintenance and compliance costs for the lease fleet and increased depreciation. Q1-25 included the results of a partially-owned leasing subsidiary that was divested in Q4-25. |
| Operating profit margin | 37.9% | | 36.4% | | |
| Gains on lease portfolio sales | | $22.0 | | $5.9 | |
| Fleet utilization | 97.3% | | 96.8% | | |
| FLRD | +1.2 | % | +17.9 | % | |
| Wholly-owned lease fleet (in units) | | 95,825 | | 86,885 | Reflects railcars transferred from partially-owned to wholly-owned and investor-owned as a result of a railcar partnership transaction completed in Q4-25 |
| Partially-owned lease fleet (in units) | | 6,135 | | 23,265 | |
| Investor-owned lease fleet (in units) | | 44,710 | | 34,215 | |
| Rail Products Group | | | |
| Revenues | | $300.0 | | $420.5 | Lower deliveries |
| Operating profit | | $22.1 | | $25.9 | Lower deliveries, partially offset by a higher mix of high-margin railcars |
| Operating profit margin | 7.4% | | 6.2% | | |
| New railcars: | | | |
| Deliveries (in units) | | 1,970 | | 3,060 | |
| Orders (in units) | | 1,660 | | 695 | |
| Order value | | $211.1 | | $109.3 | |
| Backlog value | | $1,610.1 | | $1,886.6 | |
| Sustainable railcar conversions: | | | |
| Backlog (in units) | | 440 | | 25 | |
| Backlog value | | $37.7 | | $3.1 | |
| Eliminations | | | |
| Eliminations - revenues | | $(93.8) | | $(122.5) | |
| Eliminations - operating profit | | $(3.5) | | $(6.2) | |
| Corporate and other | | | |
| Selling, engineering, and administrative expenses | | $25.7 | | $24.4 | |
| March 31, 2026 | December 31, 2025 | |
| Loan-to-value ratio | | | |
| Wholly-owned subsidiaries | 69.1% | | 70.2% | | |
Includes wholly-owned railcars, partially-owned railcars, and railcars under leased-in arrangements.
FLRD calculates the implied change in lease rates for railcar leases expiring over the next four quarters. The FLRD assumes that these expiring leases will be renewed at the most recent quarterly transacted lease rates for each railcar type. We believe the FLRD is useful to both management and investors as it provides insight into the near-term trend in lease rates.
Conference Call
Trinity will hold a conference call at 8:00 a.m. Eastern on April 30, 2026 to discuss its first quarter results. To listen to the call, please visit the Investor Relations section of the Company's website at www.trin.net and access the Events & Presentations webpage, or the live call can be accessed at 1-888-317-6003 with the conference passcode "2392682". Please call at least 10 minutes in advance to ensure a proper connection. An audio replay may be accessed through the Company’s website or by dialing 1-877-344-7529 with passcode "9259553" until 11:59 p.m. Eastern on May 7, 2026.
Additionally, the Company will provide a quarterly investor presentation that will be accessible both within the webcast and on Trinity's Investor Relations website under the Events and Presentations portion of the site along with the First Quarter Earnings Call event weblink.
Non-GAAP Financial Measures
We have included financial measures compiled in accordance with generally accepted accounting principles ("GAAP") and certain non-GAAP measures in this earnings press release to provide management and investors with additional information regarding our financial results. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies. For each non-GAAP financial measure, a reconciliation to the most comparable GAAP measure has been included in the accompanying tables. When forward-looking non-GAAP measures are provided, quantitative reconciliations to the most directly comparable GAAP measures are not provided because management cannot, without unreasonable effort, predict the timing and amounts of certain items included in the computations of each of these measures. These factors include, but are not limited to: the product mix of expected railcar deliveries; the timing and amount of significant transactions and investments, such as lease portfolio sales, capital expenditures, and returns of capital to stockholders; and the amount and timing of certain other items outside the normal course of our core business operations.
About Trinity Industries
Trinity Industries, Inc., headquartered in Dallas, Texas, owns businesses that are leading providers of rail transportation products and services in North America. Our businesses market their railcar products and services under the trade name TrinityRail®. Our platform also includes the brands of RSI Logistics, a provider of software and logistics solutions, and Holden America, a supplier of railcar parts and components. Our platform provides railcar leasing and management services; railcar manufacturing; railcar maintenance and modifications; and other railcar logistics products and services. Trinity reports its financial results in two reportable business segments: (1) Railcar Leasing and Services Group and (2) Rail Products Group. For more information, visit: www.trin.net.
Forward-looking statements notice
Some statements in this release, which are not historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about Trinity's estimates, expectations, beliefs, intentions or strategies for the future, and the assumptions underlying these forward-looking statements, including, but not limited to, future financial and operating performance, future opportunities and any other statements regarding events or developments that Trinity believes or anticipates will or may occur in the future, including the impacts of a potential shutdown, or partial shutdown, of the U.S. government. Trinity uses the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” “guidance,” “projected,” “outlook,” and similar expressions to identify these forward-looking statements. Forward-looking statements speak only as of the date of this release, and Trinity expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Trinity’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, except as required by federal securities laws. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations, including but not limited to risks and uncertainties regarding geopolitical events and conflicts, as well as economic, competitive, governmental, and technological factors affecting Trinity’s operations, markets, products, services and prices, and such forward-looking statements are not guarantees of future performance. In particular, estimates of the non-cash gain resulting from the Contribution Agreement may not be materially accurate when compared to the actual non-cash gain. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” and “Forward-Looking Statements” in Trinity’s Annual Report on Form 10-K for the most recent fiscal year, as may be revised and updated by Trinity’s Quarterly Reports on Form 10-Q, and Trinity’s Current Reports on Form 8-K.
Condensed Consolidated Statements of Operations
(in millions, except per share amounts)
| Three Months Ended March 31, | |
|---|
| 2026 | 2025 |
|---|
| Revenues | $492.0 | | $585.4 | |
| Operating costs: | | |
| Cost of revenues | 363.1 | | 443.2 | |
| Selling, engineering, and administrative expenses | 50.7 | | 50.0 | |
| Gains on dispositions of property: | | |
| Lease portfolio sales | 22.0 | | 5.9 | |
| Other | 0.9 | | 1.7 | |
| 390.9 | | 485.6 | |
| Operating profit | 101.1 | | 99.8 | |
| Interest expense, net | 65.4 | | 66.1 | |
| Other, net | 0.6 | | (2.7) | |
| Income from continuing operations before income taxes | 35.1 | | 36.4 | |
| Provision for income taxes | 8.5 | | 7.4 | |
| Income from continuing operations | 26.6 | | 29.0 | |
| Loss from discontinued operations, net of income taxes | (1.8) | | (1.9) | |
| Net income | 24.8 | | 27.1 | |
| Net income attributable to noncontrolling interest | 0.6 | | 5.0 | |
| Net income attributable to Trinity Industries, Inc. | $24.2 | | $22.1 | |
| Basic earnings per common share: | | |
| Income from continuing operations | $0.33 | | $0.29 | |
| Loss from discontinued operations | (0.02) | | (0.02) | |
| Net income attributable to Trinity Industries, Inc. | $0.30 | | $0.27 | |
| Diluted earnings per common share: | | |
| Income from continuing operations | $0.32 | | $0.29 | |
| Loss from discontinued operations | (0.02) | | (0.02) | |
| Net income attributable to Trinity Industries, Inc. | $0.30 | | $0.26 | |
| Weighted average number of shares outstanding: | | |
| Basic | 79.7 | | 81.6 | |
| Diluted | 81.9 | | 83.8 | |
Note: Earnings per common share is calculated independently for each component and may not sum to total net income attributable to Trinity Industries, Inc. per common share due to rounding.
Trinity has certain unvested restricted stock awards that participate in dividends on a nonforfeitable basis and are therefore considered to be participating securities. Consequently, diluted net income attributable to Trinity Industries, Inc. per common share is calculated under both the two-class method and the treasury stock method, and the more dilutive of the two calculations is presented.
Condensed Consolidated Balance Sheets
(in millions)
| March 31, 2026 | December 31, 2025 |
|---|
| ASSETS | | |
| Cash and cash equivalents | $132.6 | $201.3 |
| Receivables, net of allowance | 326.1 | 389.1 |
| Income tax receivable | 28.2 | 27.5 |
| Inventories | 483.2 | 469.1 |
| Restricted cash | 120.0 | 122.3 |
| Property, plant, and equipment, net: | | |
| Railcars in our lease fleet: | | |
| Wholly-owned subsidiaries | 6,534.7 | 6,512.4 |
| Partially-owned subsidiary | 370.2 | 372.2 |
| Deferred profit on railcar products sold | (623.2) | (628.6) |
| Operating and administrative assets | 361.3 | 365.3 |
| 6,643.0 | 6,621.3 |
| Goodwill | 221.5 | 221.5 |
| Other assets | 376.1 | 372.3 |
| Total assets | $8,330.7 | $8,424.4 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | |
| Accounts payable | $272.9 | $269.6 |
| Accrued liabilities | 247.2 | 301.2 |
| Debt: | | |
| Recourse | 598.6 | 598.5 |
| Non-recourse: | | |
| Wholly-owned subsidiaries | 4,516.7 | 4,573.4 |
| Partially-owned subsidiary | 267.0 | 270.6 |
| 5,382.3 | 5,442.5 |
| Deferred income taxes | 1,148.0 | 1,129.0 |
| Other liabilities | 134.6 | 136.8 |
| Stockholders' equity: | | |
| Trinity Industries, Inc. | 1,078.8 | 1,077.2 |
| Noncontrolling interest | 66.9 | 68.1 |
| 1,145.7 | 1,145.3 |
| Total liabilities and stockholders' equity | $8,330.7 | $8,424.4 |
Condensed Consolidated Statements of Cash Flows
(in millions)
| Three Months Ended March 31, |
|---|
| 2026 | 2025 |
|---|
| Operating activities: | | |
| Net cash provided by operating activities - continuing operations | $99.6 | | $78.4 | |
| Net cash used in operating activities - discontinued operations | (1.8) | | (1.9) | |
| Net cash provided by operating activities | 97.8 | | 76.5 | |
| Investing activities: | | |
| Capital expenditures - lease fleet | (151.0) | | (120.2) | |
| Proceeds from lease portfolio sales | 83.3 | | 33.7 | |
| Capital expenditures - operating and administrative | (6.3) | | (9.2) | |
| Other investing activities | 3.8 | | 4.1 | |
| Net cash used in investing activities | (70.2) | | (91.6) | |
| Financing activities: | | |
| Net proceeds from (repayments of) debt | (62.2) | | (77.3) | |
| Shares repurchased | (7.2) | | (8.2) | |
| Dividends paid to common shareholders | (24.8) | | (24.6) | |
| Other financing activities | (4.4) | | (14.1) | |
| Net cash used in financing activities | (98.6) | | (124.2) | |
| Net decrease in cash, cash equivalents, and restricted cash | (71.0) | | (139.3) | |
| Cash, cash equivalents, and restricted cash at beginning of period | 323.6 | | 374.4 | |
| Cash, cash equivalents, and restricted cash at end of period | $252.6 | | $235.1 | |
Reconciliations of Non-GAAP Measures
($ in millions, except percentages)
Adjusted Return on Equity
Adjusted Return on Equity (“Adjusted ROE”) is defined as a ratio for which (i) the numerator is calculated as income or loss from continuing operations, adjusted to exclude the effects of net income or loss attributable to noncontrolling interest; and (ii) the denominator is calculated as average Trinity stockholders’ equity (which excludes noncontrolling interest). In the following table, the numerator and denominator of our Adjusted ROE calculation are reconciled to income from continuing operations and total stockholders’ equity, respectively, which are the most directly comparable GAAP financial measures. Management believes that Adjusted ROE is a useful measure to both management and investors as it provides an indication of the economic return on the Company’s investments over time. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.
| LTM March 31, 2026 | March 31, 2025 |
|---|
| ($ in millions) |
|---|
| Numerator: | | |
| Income from continuing operations | $282.1 | |
| Net income attributable to noncontrolling interest | (19.8) | |
| Net income from continuing operations attributable to Trinity Industries, Inc. | $262.3 | |
| Denominator: | | |
| Total stockholders' equity | $1,145.7 | $1,299.7 |
| Noncontrolling interest | (66.9) | (246.5) |
| Trinity stockholders' equity | $1,078.8 | $1,053.2 |
| Average total stockholders' equity | $1,222.7 | |
| Return on Equity | 23.1% | |
| Average Trinity stockholders' equity | $1,066.0 | |
| Adjusted Return on Equity | 24.6% | |
Return on Equity is calculated as income from continuing operations divided by average total stockholders' equity.
Adjusted Return on Equity is calculated as net income from continuing operations attributable to Trinity Industries, Inc. divided by average Trinity stockholders' equity, each as defined and reconciled above.
Cash Flow from Operations with Net Gains on Lease Portfolio Sales
Cash flow from operations with net gains on lease portfolio sales is a non-GAAP financial measure. We believe this measure is useful to both management and investors as it provides a relevant measure of liquidity and a useful basis for assessing the breadth of the cash flow generation capabilities across our operating platform, as well as our ability to fund our operations and repay our debt. This measure is defined as net cash provided by operating activities from continuing operations as computed in accordance with GAAP, plus net gains on lease portfolio sales and is reconciled to net cash provided by operating activities from continuing operations, the most directly comparable GAAP financial measure, in the following table. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.
| Three Months Ended March 31, |
|---|
| 2026 | 2025 |
|---|
| Net cash provided by operating activities - continuing operations | $99.6 | | $78.4 | |
| Net gains on lease portfolio sales | 22.0 | | 5.9 | |
| Cash flow from operations with net gains on lease portfolio sales | $121.6 | | $84.3 | |
EBITDA
“EBITDA” is defined as income from continuing operations plus interest expense, provision for income taxes, and depreciation and amortization expense. EBITDA is a non-GAAP financial measure; however, the amounts included in the calculation are derived from amounts included in our GAAP financial statements. EBITDA is reconciled to net income, the most directly comparable GAAP financial measure, in the following table. This information is provided to assist management and investors in making meaningful comparisons of our operating performance between periods. We believe EBITDA is a useful measure for analyzing the performance of our business. We also believe that EBITDA is commonly reported and widely used by investors and other interested parties as a measure of a company’s operating performance and debt servicing ability because it assists in comparing performance on a consistent basis without regard to capital structure, depreciation or amortization (which can vary significantly depending on many factors). EBITDA should not be considered as an alternative to net income, as an indicator of our operating performance, or as an alternative to operating cash flows as measures of liquidity. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures for other companies.
| Three Months Ended March 31, | |
|---|
| 2026 | 2025 |
|---|
| Net income | $24.8 | | $27.1 | |
| Less: Loss from discontinued operations, net of income taxes | (1.8) | | (1.9) | |
| Income from continuing operations | 26.6 | | 29.0 | |
| Interest expense | 68.2 | | 68.8 | |
| Provision for income taxes | 8.5 | | 7.4 | |
| Depreciation and amortization expense | 72.6 | | 74.3 | |
| EBITDA | $175.9 | | $179.5 | |
Contacts
Leigh Anne Mann
Vice President, Investor Relations
(Investors) 214/631-4420
Jack L. Todd
Vice President, Public Affairs
(Media Line) 214/589-8909
TABLES TO FOLLOW -
Open the filing on EDGARTrinity Industries, Inc.
Earnings Release Conference Call - Q1 2026
Leigh Anne Mann
Vice President, Investor Relations
Thank you, operator. Good morning everyone. We appreciate you joining us for the Company’s first quarter 2026 financial results conference call.
Our prepared remarks will include comments from Jean Savage, Trinity’s Chief Executive Officer and President, and Eric Marchetto, the Company’s Chief Financial Officer. We will hold a Q&A session following the prepared remarks from our leaders.
During the call today, we will reference certain non-GAAP financial metrics. The reconciliations of the non-GAAP metrics to comparable GAAP measures are provided in the appendix of the quarterly investor slides, which are accessible on our investor relations website at www.trin.net. These slides are under the Events and Presentations portion of the website, along with the First Quarter Earnings Conference Call event link.
A replay of today’s call will be available after 10:30 a.m. Eastern time through midnight on May 7th, 2026. Replay information is available under the Events and Presentations page on our Investor Relations website.
It is now my pleasure to turn the call over to Jean.
E. Jean Savage
Chief Executive Officer and President
Thank you, Leigh Anne, and good morning everyone.
We grew earnings per share year over year 10% in a quarter where revenue was down 16%. That's the operating leverage we've been building toward, and it shows up in a 24.6% Adjusted Return on Equity over the last twelve months. Cash flow from continuing operations was $100 million. The business is performing the way we designed it to perform.
Before I get into results, I want to recognize the team for closing a transaction after the quarter closed related to our railcar investment partnership with Napier Park. As a result of the transaction, approximately 6,100 railcars moved from our partially-owned fleet to investor-owned fleet, and we took an 11.2% limited partnership interest in the Napier Park entity that owns the majority of Napier
Park’s railcar holdings. We expect to record a non-cash pre-tax gain of approximately $130 million in the second quarter related to this transaction. This transaction highlights the embedded value of our fleet and is another step in simplifying our balance sheet.
Based on strong first quarter performance and our outlook for the balance of the year, we are raising and tightening our full year EPS guidance from a previous range of $1.85 to $2.10 to a new range of $2.20 to $2.40. At the midpoint, this represents a 16% increase in our EPS expectations. Portfolio sales are an integral part of how our leasing platform creates value, and we now expect a higher level of gain-on-sale activity this year than we originally planned. We expect full year gains to be in the range of $160 million to $180 million, which includes $22 million in the first quarter and approximately $130 million from the railcar investment partnership that we will book in the second quarter.
Now let me walk you through what we're seeing in the market.
Market Update
The rail economy is improving. Industrial production grew at an annual rate of 2.4% in the first quarter. The Manufacturing PMI, a key monthly economic indicator, was above 50 for three straight months - that's the first back-to-back positive reading in over 40 months - and has been expanding for seventeen straight months. Inquiries have been trending up since the start of the year. Furthermore, railcars in storage moved below 20% as the industry fleet continues to contract and carloads rise.
The picture isn't all clean, however. Inflation is still elevated, and employment has flattened. That continues to weigh on consumer-driven markets, particularly autos and intermodal, and tariff uncertainty remains.
But the direction is the right one, and we're positioned for it.
Segment Performance
I'll take you through both segments, starting with Leasing and Services.
Leasing and Services
Leasing performed. Lease rates were higher, utilization was higher, and the segment delivered a 37.9% operating margin in the quarter.
Revenue was down year over year, and the reason is structural - we closed a railcar partnership exchange in the fourth quarter, which reduced our consolidated fleet. Our owned fleet ended the quarter at 101,960 railcars, down about 7% year over year. But the number that matters strategically is our combined owned and investor-owned fleet at 146,670 railcars, which is up 1.6% year over year. We're growing the platform and lease rates continue to rise. Renewal rates were 6.6% above expiring rates in the quarter.
We continue to invest. Net fleet investment was $68 million in the quarter. Over the last six years, we've added more than 18,000 new builds and over 14,000 cars from the secondary market. We were active in the secondary market again this quarter, completing $83 million of lease portfolio sales.
Fleet utilization improved to 97.3%. Renewal success was 60%, and higher assignment activity allowed us to place cars with new customers at higher rates. The Future Lease Rate Differential, or FLRD, was a positive 1.2%. The FLRD has been positive for 19 consecutive quarters allowing for continuing growth in lease rates and leasing revenue. The average lease rate continued to increase quarter over quarter and year over year.
Rail Products
Rail Products is where the cost work shows up. We delivered 1,970 railcars at a 7.4% operating margin. On these volumes, that margin is a proof point. It reflects favorable Q1 mix, but more importantly, it reflects several years of right-sizing, automation, and breakeven reduction in this business. The cost structure has changed. With the remaining mix of car types to be built, we expect full year Rail Products Group margins to average 5% to 6%.
We received orders for 1,660 new railcars. Both orders and deliveries remain within our usual market share range. Inquiries are accelerating, and we're ready to ramp up when the inquiries convert to orders. Backlog stands at $1.6 billion, just under half of the industry backlog.
We're not going to chase volume at the wrong price. When the market turns, we'll be there.
Conclusion
Here's where we stand.
We did what we said we'd do this quarter. Margins held up. The fleet is in good shape at 97.3% utilization. Lease rates moved in our direction, and Rail Products delivered a 7.4% operating margin on lower volumes, which is evidence that the cost work we've done over the past several years is paying off.
The order book is the watch item. Inquiries are picking up, and we're ready when customers are ready.
I'm proud of how this team is executing, and I'm confident in where we're headed. Eric will take you through the financials and our guidance for the rest of the year.
Eric R. Marchetto
Executive Vice President and Chief Financial Officer
Thank you, Jean, and good morning everyone.
I will begin by discussing our first quarter financial highlights. Our operating margins expanded in both segments. Cash generation was strong at $100 million from continuing operations. Our business is generating good returns and is proving its ability to outperform the market through the cycle. We have $1.1 billion of liquidity, and we continue to return capital to shareholders. Let me walk you through the income statement, cash flow, and balance sheet, and then I'll cover guidance for the rest of the year.
Income Statement
First quarter revenues of $492 million reflect lower external deliveries in the Rail Products Group. However, as Jean mentioned, GAAP EPS from continuing operations improved as compared to last year to $0.32, which reflects higher gains on lease portfolio sales and higher lease rates, generating higher operating margins. We generated proceeds of $83 million in the quarter from lease portfolio sales and recorded a gain of $22 million.
Cash Flow Statement
Moving to the cash flow statement, cash flow from continuing operations was $100 million, benefited from a reduction in working capital. Our total net fleet investment was $68 million in the quarter, which included new railcar additions, secondary market adds, and fleet modifications and betterments. This includes $83 million of railcar sales in the secondary market. Shareholder returns were $32 million in the quarter, largely driven by our quarterly dividend payment, as well as share repurchases.
For the three-year period 2024 to 2026, we set a target for our cash flow metric, which adds cash flow from continuing operations and net gains on lease portfolio sales, of $1.2 to $1.4 billion. With three quarters remaining in the planning period, we expect to exceed this range. That is a significant amount of cash generation, and we are constantly working to make optimal choices on how we grow our fleet and improve the returns on our business.
Balance Sheet
Moving to our balance sheet, we have solid liquidity of $1.1 billion. The loan-to-value for our wholly-owned fleet is 69.1%. It is worth noting that the market value of our fleet is much higher than the book value of our fleet, and our LTV is based on the net book value. The debt structure on our balance sheet gives us significant flexibility and liquidity as we execute on our capital allocation framework demonstrated by our latest financing.
After the quarter closed, we issued $481 million of ABS notes and used the proceeds to redeem $377 million in outstanding debt, generating approximately $100 million of excess cash and providing further evidence of our cash generation abilities.
Guidance
And now I’d like to give some updated guidance for the rest of the year. We expect industry deliveries of 25,000 railcars in 2026 and expect Trinity to maintain its historical share of deliveries. While there is still some available space to be sold for the end of 2026, current inquiry levels support maintaining this guidance. We are slightly lowering our expected full year net lease fleet investment to a range of $350 million to $450 million, reflecting expected higher proceeds from railcar sales. As a reminder, this is a cash metric, so this would not include the sale of railcars into the Napier Park RIV program. We are investing $55 million to $65 million in operating and administrative capital expenditures.
And, as Jean mentioned, we are raising our full year EPS guidance to a range of $2.20 to $2.40, a 16% increase at the midpoint. This comes from higher than expected gains in the railcar partnership transaction, as well as higher forecasted gains from the secondary market. We expect full year gains to be in the range of $160 million to $180 million.
Our first quarter demonstrates the operating leverage we have been building. The business is built to perform throughout the cycle. Our disciplined cash flow management and our optimized balance sheet give us flexibility in capital allocation and working capital management. Our lease fleet utilization is high, generating consistent, predictable revenue and cash flow. In short, our platform is performing, and today’s results and 2026 guidance reflect our conviction in Trinity’s ability to continue to generate above-market returns for our shareholders.
Operator, we are now ready for our first question.
E. Jean Savage
Chief Executive Officer and President
Thank you for joining us today. Our first quarter results highlight the operating leverage we've been building and the progress we're making across the business. We remain focused on what got us here - disciplined execution, delivering for our customers, and creating value for our shareholders. Thank you for your continued interest in Trinity.