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GATX Corporation (GATX - Free Report) reported better-than-expected earnings per share but lower-than-expected revenues in the second quarter of 2017. The company’s earnings (on an adjusted basis) of $1.32 per share surpassed the Zacks Consensus Estimate of $1.10.
Revenues of $348.8 million fell short of the Zacks Consensus Estimate of $360.7 million. However, both earnings and revenues declined year over year, reflecting challenging market conditions. While the bottom line contracted 11.41%, revenues declined 2.93%.
Segment-Wise Results
Profits at the Rail North America segment were $74.9 million compared with $76.8 million, reported a year ago. This downside was mainly due to lower lease revenues and higher maintenance costs.
During the reported quarter, GATX Corp.’s Lease Price Index (LPI) plunged 21.4% compared with a reduction of 25.4% in the second quarter of 2016. The metric declined 32.6% in the previous quarter. Furthermore, average lease renewal term for cars included in the LPI was 32 months in the reported quarter compared with 34 months in the year-ago quarter.
Per GATX Corp.’s press release, Rail North America’s wholly owned fleet had approximately 121,000 railcars at the end of the second quarter. Fleet utilization came in at 98.8%, marginally up from the year-ago quarter.
Profits at the Rail International segment rallied 27.7% year over year to $16.6 million. This upside was driven by lower maintenance expenses. Also, GATX Rail Europe’s fleet totaled approximately 23,000 cars at the end of the reported quarter. Fleet utilization was 95.7% compared with 94.8%at the end of the second quarter of 2016.
Profits at the Portfolio Management unit were $19.8 million in the discussed quarter, significantly down from the year-ago figure of $36.5 million. The American Steamship segment’s profit of $6.5 million in the second quarter compared favorably with the year-ago profit of $4.2 million.
GATX Corporation Price, Consensus and EPS Surprise
GATX Corp. exited the quarter with cash and cash equivalents of $284.3 million compared with $307.5 million at the end of 2016. Restricted cash was $3.7 million compared with $3.6 million at the end of 2016.
Investors interested in the broader transportation space are keenly waiting for second-quarter earnings reports from key players like Canadian National Railway Company (CNI - Free Report) , Alaska Air Group (ALK - Free Report) and Norfolk Southern Corporation (NSC - Free Report) . While Canadian National is scheduled to report its second-quarter results on Jul 25, Alaska Air Group and Norfolk Southern will both report on Jul 26.
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Image: Bigstock
GATX Corp (GATX) Q2 EarningsTop, Revenues Lag, View Intact
GATX Corporation (GATX - Free Report) reported better-than-expected earnings per share but lower-than-expected revenues in the second quarter of 2017. The company’s earnings (on an adjusted basis) of $1.32 per share surpassed the Zacks Consensus Estimate of $1.10.
Revenues of $348.8 million fell short of the Zacks Consensus Estimate of $360.7 million. However, both earnings and revenues declined year over year, reflecting challenging market conditions. While the bottom line contracted 11.41%, revenues declined 2.93%.
Segment-Wise Results
Profits at the Rail North America segment were $74.9 million compared with $76.8 million, reported a year ago. This downside was mainly due to lower lease revenues and higher maintenance costs.
During the reported quarter, GATX Corp.’s Lease Price Index (LPI) plunged 21.4% compared with a reduction of 25.4% in the second quarter of 2016. The metric declined 32.6% in the previous quarter. Furthermore, average lease renewal term for cars included in the LPI was 32 months in the reported quarter compared with 34 months in the year-ago quarter.
Per GATX Corp.’s press release, Rail North America’s wholly owned fleet had approximately 121,000 railcars at the end of the second quarter. Fleet utilization came in at 98.8%, marginally up from the year-ago quarter.
Profits at the Rail International segment rallied 27.7% year over year to $16.6 million. This upside was driven by lower maintenance expenses. Also, GATX Rail Europe’s fleet totaled approximately 23,000 cars at the end of the reported quarter. Fleet utilization was 95.7% compared with 94.8%at the end of the second quarter of 2016.
Profits at the Portfolio Management unit were $19.8 million in the discussed quarter, significantly down from the year-ago figure of $36.5 million. The American Steamship segment’s profit of $6.5 million in the second quarter compared favorably with the year-ago profit of $4.2 million.
GATX Corporation Price, Consensus and EPS Surprise
GATX Corporation Price, Consensus and EPS Surprise | GATX Corporation Quote
Liquidity
GATX Corp. exited the quarter with cash and cash equivalents of $284.3 million compared with $307.5 million at the end of 2016. Restricted cash was $3.7 million compared with $3.6 million at the end of 2016.
Outlook for 2017
This Zacks Rank #3 (Hold) company still expects 2017 earnings per share in the band of $4.40–$4.60. In fact, the Zacks Consensus Estimate of $4.58 is within this guided range. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Investors interested in the broader transportation space are keenly waiting for second-quarter earnings reports from key players like Canadian National Railway Company (CNI - Free Report) , Alaska Air Group (ALK - Free Report) and Norfolk Southern Corporation (NSC - Free Report) . While Canadian National is scheduled to report its second-quarter results on Jul 25, Alaska Air Group and Norfolk Southern will both report on Jul 26.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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