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Why Is Gatx (GATX) Down 5.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for Gatx (GATX - Free Report) . Shares have lost about 5.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Gatx 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.
GATX Q2 Earnings Beat Estimates
GATX's second-quarter 2023 earnings per share (EPS) of $1.73 outpaced the Zacks Consensus Estimate of $1.61. The bottom line grew 1.7% year over year. Revenues of $343.2 million missed the Zacks Consensus Estimate of $356.9 million but improved 9.7% year over year.
Lease revenues of $308.6 million grew 8.3% year over year, while Marine operating revenues decreased 61.5% to $2 million. Revenues from other sources rose 44.2% to $32.6 million.
Total expenses (on a reported basis) rose 7.8% to $248.8 million.
Profits in the Rail North American segment increased to $79.3 million from $53.1 million a year ago. The renewal lease rate change of GATX’s Lease Price Index (LPI) was 33.1% in the reported quarter compared with the year-ago quarter’s 6.1%. The average lease renewal term for cars included in LPI was 61 months compared with 51 months a year ago.
Rail North America’s wholly-owned fleet consisted of approximately 109,500 rail cars at June 2023-end. Fleet utilization was 99.3%, flat sequentially.
In the Rail International segment, profits fell 3.5% year over year to $27.3 million in the second quarter. Results were unfavorably impacted by foreign currency exchange rate fluctuations partially offset by more railcars on lease.
GATX Rail Europe’s fleet totaled around 28,800 rail cars at the second-quarter end. Fleet utilization was 96.9% in the reported quarter compared with 99.9% at the end of second-quarter 2022.
The Portfolio Management unit reported a segmental profit of $26.6 million in the second quarter against a segmental loss of $15.7 million in the year-ago quarter.
As of Jun 30, 2023, GATX had cash and cash equivalents of $317.5 million compared with $177.4 million at the end of March 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Gatx has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Gatx has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Gatx (GATX) Down 5.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Gatx (GATX - Free Report) . Shares have lost about 5.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Gatx 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.
GATX Q2 Earnings Beat Estimates
GATX's second-quarter 2023 earnings per share (EPS) of $1.73 outpaced the Zacks Consensus Estimate of $1.61. The bottom line grew 1.7% year over year. Revenues of $343.2 million missed the Zacks Consensus Estimate of $356.9 million but improved 9.7% year over year.
Lease revenues of $308.6 million grew 8.3% year over year, while Marine operating revenues decreased 61.5% to $2 million. Revenues from other sources rose 44.2% to $32.6 million.
Total expenses (on a reported basis) rose 7.8% to $248.8 million.
Profits in the Rail North American segment increased to $79.3 million from $53.1 million a year ago. The renewal lease rate change of GATX’s Lease Price Index (LPI) was 33.1% in the reported quarter compared with the year-ago quarter’s 6.1%. The average lease renewal term for cars included in LPI was 61 months compared with 51 months a year ago.
Rail North America’s wholly-owned fleet consisted of approximately 109,500 rail cars at June 2023-end. Fleet utilization was 99.3%, flat sequentially.
In the Rail International segment, profits fell 3.5% year over year to $27.3 million in the second quarter. Results were unfavorably impacted by foreign currency exchange rate fluctuations partially offset by more railcars on lease.
GATX Rail Europe’s fleet totaled around 28,800 rail cars at the second-quarter end. Fleet utilization was 96.9% in the reported quarter compared with 99.9% at the end of second-quarter 2022.
The Portfolio Management unit reported a segmental profit of $26.6 million in the second quarter against a segmental loss of $15.7 million in the year-ago quarter.
As of Jun 30, 2023, GATX had cash and cash equivalents of $317.5 million compared with $177.4 million at the end of March 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Gatx has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Gatx has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.