Trinity Industries (NYSE:TRN) continued its strong performance in the first quarter, as demand remained robust in all of the diversified manufacturer's businesses. The latest update indicates that Trinity will not want for more business in the near term. However, investors should be mindful of the changes in Trinity's balance sheet going forward.

Trinity reported that first-quarter revenue hit $760.9 million, an increase of 18% from the first quarter of 2005. As has been the case in recent quarters, earnings growth was explosive. Net income to common shareholders was up almost 612% to $37 million, which translated into EPS of $0.70.

The railcar business remained Trinity's major earner, generating 77% of the quarter's operating profit. The outlook for this business, which saw operating earnings surge 548% year over year to $57 million, remains very good, thanks in part to positive trends at railroad companies like Burlington Northern (NYSE:BNI). Trinity received 12,941 orders for railcars in North America in the quarter, the most orders it has had in a single quarter since 1998. Performance at Trinity's other groups was also nothing to sneeze at, particularly results from the energy equipment unit; operating earnings there more than doubled -- to $11.1 million -- because of burgeoning growth in wind tower construction.

These positive results aside, some items on Trinity's balance sheet are worth a closer look. Cash and equivalents, for example, have declined 38% since the end of last year, to $93.6 million. At the same time, debt is up 12%, to $770.3 million, since the end of 2005, and up 44% since the first quarter of 2005. These changes resulted from the need to rapidly boost inventories and property, plants, and equipment to meet surging demand. Still, it's worth watching these items in the future to see whether Trinity can manage future expansion without further straining its balance sheet.

Trinity remains on course for continued solid earnings growth. But as expansion continues, balance sheet health should be considered another metric of the company's success.

Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.