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GATX Corp Q4 Earnings Disappoint, Revenues Top Estimates
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GATX Corporation (GATX - Free Report) delivered mixed results in the fourth quarter of 2017. Evidently, the company reported lower-than-expected earnings per share but better-than-expected revenues.
The company’s earnings of 68 cents per share (excluding $8.15 per share from non-recurring items) fell short of the Zacks Consensus Estimate of 72 cents. However, revenues of $352.8 million surpassed the Zacks Consensus Estimate of $346.1 million.
In the reported quarter, both earnings and revenues declined on a year-over-year basis, reflecting challenging market conditions. While the bottom line contracted 40.4%, revenues declined 2.6%.
Segment-Wise Results
Profits at the Rail North America segment improved to $61.2 million from $48.5 million a year ago. The uptick was mainly due to higher revenues. In the fourth quarter, the renewal lease rate change of the company’s Lease Price Index (LPI) was -32.4%. Additionally, average lease renewal term for cars included in the LPI was 36 months 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 reported quarter. Fleet utilization came in at 98.2% compared with 98.9% at the end of 2016.
Profits at the Rail International segment increased 32.6% year over year to $18.7 million. The upside was owing to lower maintenance expenses apart from the increase in railcars on lease at GATX Rail Europe.
Moreover, GATX Rail Europe’s fleet totaled approximately 23,000 rail cars at the end of 2017. Fleet utilization was 96.8% compared with 95.6% at the end of 2016.
Profits at the Portfolio Management unit were $6.1 million in the quarter, which compared favorably to the year-ago loss of $2.8 million. The favorable performance can be attributed to increased operational efficiency apart from an uptick pertaining to tonnage. However, the American Steamship segment's profit of $9 million in the same quarter compared unfavorably with the year-ago profit of $17.7 million. Lower contributions from the marine portfolio led to the downturn.
GATX Corporation Price, Consensus and EPS Surprise
GATX exited the 2017 with cash and cash equivalents of $296.5 million compared with $307.5 million at the end of 2016. Restricted cash was $3.2 million compared with $3.6 million at the end of 2016.
Outlook for 2018 Unveiled
This Zacks Rank #2 (Buy) company expects 2018 earnings per share in the range of $4.55-$4.75. The projection incorporates an impact to the tune of roughly 20 cents share due to the new tax law (Tax Cuts and Jobs Act), which reduces corporate taxes from 35% to 21%. Currently, the Zacks Consensus Estimate for 2018 earnings per share is pegged at $4.29 per share. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Investors interested in the Zacks Transportation sector are keenly awaiting fourth-quarter earnings reports from key players like United Continental Holdings (UAL - Free Report) , Canadian National Railway Company (CNI - Free Report) and Norfolk Southern Corp. (NSC - Free Report) in the coming days. While United Continental and Canadian National are scheduled to report on Jan 23, Norfolk Southern will do the same on Jan 24.
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GATX Corp Q4 Earnings Disappoint, Revenues Top Estimates
GATX Corporation (GATX - Free Report) delivered mixed results in the fourth quarter of 2017. Evidently, the company reported lower-than-expected earnings per share but better-than-expected revenues.
The company’s earnings of 68 cents per share (excluding $8.15 per share from non-recurring items) fell short of the Zacks Consensus Estimate of 72 cents. However, revenues of $352.8 million surpassed the Zacks Consensus Estimate of $346.1 million.
In the reported quarter, both earnings and revenues declined on a year-over-year basis, reflecting challenging market conditions. While the bottom line contracted 40.4%, revenues declined 2.6%.
Segment-Wise Results
Profits at the Rail North America segment improved to $61.2 million from $48.5 million a year ago. The uptick was mainly due to higher revenues. In the fourth quarter, the renewal lease rate change of the company’s Lease Price Index (LPI) was -32.4%. Additionally, average lease renewal term for cars included in the LPI was 36 months 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 reported quarter. Fleet utilization came in at 98.2% compared with 98.9% at the end of 2016.
Profits at the Rail International segment increased 32.6% year over year to $18.7 million. The upside was owing to lower maintenance expenses apart from the increase in railcars on lease at GATX Rail Europe.
Moreover, GATX Rail Europe’s fleet totaled approximately 23,000 rail cars at the end of 2017. Fleet utilization was 96.8% compared with 95.6% at the end of 2016.
Profits at the Portfolio Management unit were $6.1 million in the quarter, which compared favorably to the year-ago loss of $2.8 million. The favorable performance can be attributed to increased operational efficiency apart from an uptick pertaining to tonnage. However, the American Steamship segment's profit of $9 million in the same quarter compared unfavorably with the year-ago profit of $17.7 million. Lower contributions from the marine portfolio led to the downturn.
GATX Corporation Price, Consensus and EPS Surprise
GATX Corporation Price, Consensus and EPS Surprise | GATX Corporation Quote
Liquidity
GATX exited the 2017 with cash and cash equivalents of $296.5 million compared with $307.5 million at the end of 2016. Restricted cash was $3.2 million compared with $3.6 million at the end of 2016.
Outlook for 2018 Unveiled
This Zacks Rank #2 (Buy) company expects 2018 earnings per share in the range of $4.55-$4.75. The projection incorporates an impact to the tune of roughly 20 cents share due to the new tax law (Tax Cuts and Jobs Act), which reduces corporate taxes from 35% to 21%. Currently, the Zacks Consensus Estimate for 2018 earnings per share is pegged at $4.29 per share. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Investors interested in the Zacks Transportation sector are keenly awaiting fourth-quarter earnings reports from key players like United Continental Holdings (UAL - Free Report) , Canadian National Railway Company (CNI - Free Report) and Norfolk Southern Corp. (NSC - Free Report) in the coming days. While United Continental and Canadian National are scheduled to report on Jan 23, Norfolk Southern will do the same on Jan 24.
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.
It's not the one you think.
See This Ticker Free >>