We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is GATX Corp (GATX) Down 4.6% Since the Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for GATX Corporation (GATX - Free Report) . Shares have lost about 4.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
First quarter earnings
GATX Corporation reported better-than-expected earnings per share and revenues in the first quarter of 2017. The company’s earnings (on an adjusted basis) of $1.44 per share breezed past the Zacks Consensus Estimate of $1.08. Revenues of $316.1 million were also above the Zacks Consensus Estimate of $312.2 million.
However, in the first quarter both earnings and revenues declined on a year-over-year basis, reflecting the challenging market conditions. While the bottom line contracted 11.11%, revenues declined 5.5%.
Segment-Wise Results
Profits at the Rail North America segment declined to $93 million from $108.7 million a year ago. The downside was mainly due to lower lease revenue and higher maintenance costs. During the quarter, GATX Corp.’s Lease Price Index (LPI) decreased 32.6% as against 6.4% increase in the same period last year. The metric declined 36.2% in the previous quarter. Furthermore, average lease renewal term for cars included in the LPI was 29 months in the reported quarter as against 34 months in the year-ago quarter.
GATX Corp. stated that Rail North America’s wholly owned fleet had approximately 121,000 rail cars at the end of the first quarter of 2017. Fleet utilization came in at 99.1% compared with 98.9% in the year-earlier quarter.
Profits at the Rail International segment improved 6.3% year over year to $13.4 million. The upside was driven by lower maintenance expenses. GATX Rail Europe’s fleet totaled approximately 23,100 rail cars at the end of the reported quarter. Fleet utilization was 95% compared with 95.1% at the end of the first quarter of 2016.
Profits at the Portfolio Management unit were $14.7 million in the quarter, down significantly from the year-ago figure of $18.6 million. The American Steamship segment's loss of $0.2 million in the first quarter compared unfavorably with the year-ago profit of $0.9 million.
Liquidity
GATX Corp. exited the quarter with cash and cash equivalents of $155.2 million compared with $307.5 million at the end of 2016. Restricted cash was $3.8 million compared with $3.6 million at the end of 2016.
Outlook
The company still expects 2017 earnings per share in the band of $4.40–$4.60.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, GATX Corp's the stock has a subpar score of 'D' on both growth and momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is solely suitable for value investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is GATX Corp (GATX) Down 4.6% Since the Last Earnings Report?
It has been about a month since the last earnings report for GATX Corporation (GATX - Free Report) . Shares have lost about 4.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
First quarter earnings
GATX Corporation reported better-than-expected earnings per share and revenues in the first quarter of 2017. The company’s earnings (on an adjusted basis) of $1.44 per share breezed past the Zacks Consensus Estimate of $1.08. Revenues of $316.1 million were also above the Zacks Consensus Estimate of $312.2 million.
However, in the first quarter both earnings and revenues declined on a year-over-year basis, reflecting the challenging market conditions. While the bottom line contracted 11.11%, revenues declined 5.5%.
Segment-Wise Results
Profits at the Rail North America segment declined to $93 million from $108.7 million a year ago. The downside was mainly due to lower lease revenue and higher maintenance costs. During the quarter, GATX Corp.’s Lease Price Index (LPI) decreased 32.6% as against 6.4% increase in the same period last year. The metric declined 36.2% in the previous quarter. Furthermore, average lease renewal term for cars included in the LPI was 29 months in the reported quarter as against 34 months in the year-ago quarter.
GATX Corp. stated that Rail North America’s wholly owned fleet had approximately 121,000 rail cars at the end of the first quarter of 2017. Fleet utilization came in at 99.1% compared with 98.9% in the year-earlier quarter.
Profits at the Rail International segment improved 6.3% year over year to $13.4 million. The upside was driven by lower maintenance expenses. GATX Rail Europe’s fleet totaled approximately 23,100 rail cars at the end of the reported quarter. Fleet utilization was 95% compared with 95.1% at the end of the first quarter of 2016.
Profits at the Portfolio Management unit were $14.7 million in the quarter, down significantly from the year-ago figure of $18.6 million. The American Steamship segment's loss of $0.2 million in the first quarter compared unfavorably with the year-ago profit of $0.9 million.
Liquidity
GATX Corp. exited the quarter with cash and cash equivalents of $155.2 million compared with $307.5 million at the end of 2016. Restricted cash was $3.8 million compared with $3.6 million at the end of 2016.
Outlook
The company still expects 2017 earnings per share in the band of $4.40–$4.60.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
GATX Corporation Price and Consensus
GATX Corporation Price and Consensus | GATX Corporation Quote
VGM Scores
At this time, GATX Corp's the stock has a subpar score of 'D' on both growth and momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is solely suitable for value investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.