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Why Is GATX Down 5.5% Since the Last Earnings Report?
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It has been more than a month since the last earnings report for GATX Corporation (GATX - Free Report) . Shares have lost about 5.5% 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 as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
GATX Corporation's earnings of $1.25 per share breezed past the Zacks Consensus Estimate of 99 cents. Revenues of $359.6 million were also above the Zacks Consensus Estimate of $349.6 million.
However, in the third quarter both earnings and revenues declined on a year-over-year basis, reflecting the challenging market conditions. While the bottom line contracted 44.4%, revenues declined 0.9%.
Segment-Wise Results
Profits at the Rail North America segment declined to $70.2 million from $87.9 million a year ago. The downside was mainly due to lower revenues and higher maintenance costs. During the reported quarter, the renewal lease rate change of the company’s Lease Price Index stood at -27%. Furthermore, average lease renewal term for cars included in the LPI was 35 months in the reported quarter compared with 29 months in the year-ago quarter.
Per this transportation company’s press release, Rail North America’s wholly owned fleet had approximately 120,000 rail cars at the end of the third quarter. Fleet utilization came in at 98.5% compared with 99% in the year-earlier quarter.
Profits at the Rail International segment decreased 13.7% year over year to $20.1 million. The downside was due to lower insurance proceeds. Moreover, GATX Rail Europe’s fleet totaled approximately 23,000 rail cars at the end of the reported quarter. Fleet utilization was 95.6% compared with 95% at the end of the third quarter of 2016.
Profits at the Portfolio Management unit were $12.8 million in the quarter, down significantly from the year-ago figure of $64.1 million. The decline was primarily due to a residual sharing fee settlement amounting to $49.1 million, that was received last year. The American Steamship segment's profit of $12.1 million in the third quarter compared favorably with the year-ago profit of $7.8 million.
Liquidity
GATX Corp. exited the quarter with cash and cash equivalents of $199.2 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 Tweaked
The company expects 2017 earnings per share at the high end or marginally exceed the range of $4.40-$4.60 (earlier guidance had hinted at earnings in the range of $4.40-$4.60). Better-than-expected performances of GATX International and American Steamship units contributed to the slightly better guidance
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
VGM Scores
At this time, the stock has a poor Growth Score of F, however its Momentum is doing a lot better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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 more suitable for value investors than momentum investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of this revision also indicates a downward shift. Notably. the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is GATX Down 5.5% Since the Last Earnings Report?
It has been more than a month since the last earnings report for GATX Corporation (GATX - Free Report) . Shares have lost about 5.5% 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 as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
GATX Corporation's earnings of $1.25 per share breezed past the Zacks Consensus Estimate of 99 cents. Revenues of $359.6 million were also above the Zacks Consensus Estimate of $349.6 million.
However, in the third quarter both earnings and revenues declined on a year-over-year basis, reflecting the challenging market conditions. While the bottom line contracted 44.4%, revenues declined 0.9%.
Segment-Wise Results
Profits at the Rail North America segment declined to $70.2 million from $87.9 million a year ago. The downside was mainly due to lower revenues and higher maintenance costs. During the reported quarter, the renewal lease rate change of the company’s Lease Price Index stood at -27%. Furthermore, average lease renewal term for cars included in the LPI was 35 months in the reported quarter compared with 29 months in the year-ago quarter.
Per this transportation company’s press release, Rail North America’s wholly owned fleet had approximately 120,000 rail cars at the end of the third quarter. Fleet utilization came in at 98.5% compared with 99% in the year-earlier quarter.
Profits at the Rail International segment decreased 13.7% year over year to $20.1 million. The downside was due to lower insurance proceeds. Moreover, GATX Rail Europe’s fleet totaled approximately 23,000 rail cars at the end of the reported quarter. Fleet utilization was 95.6% compared with 95% at the end of the third quarter of 2016.
Profits at the Portfolio Management unit were $12.8 million in the quarter, down significantly from the year-ago figure of $64.1 million. The decline was primarily due to a residual sharing fee settlement amounting to $49.1 million, that was received last year. The American Steamship segment's profit of $12.1 million in the third quarter compared favorably with the year-ago profit of $7.8 million.
Liquidity
GATX Corp. exited the quarter with cash and cash equivalents of $199.2 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 Tweaked
The company expects 2017 earnings per share at the high end or marginally exceed the range of $4.40-$4.60 (earlier guidance had hinted at earnings in the range of $4.40-$4.60). Better-than-expected performances of GATX International and American Steamship units contributed to the slightly better guidance
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
VGM Scores
At this time, the stock has a poor Growth Score of F, however its Momentum is doing a lot better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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 more suitable for value investors than momentum investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of this revision also indicates a downward shift. Notably. the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.