CAI International Earnings: Here’s Why Investors are Not Happy Now

CAI International Inc. (NYSE:CAP) delivered a profit and met Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 0.87%.

CAI International Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 1.19% to $0.85 in the quarter versus EPS of $0.66 in the year-earlier quarter.

Revenue: Rose 37.56% to $49.85 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: CAI International Inc. reported adjusted EPS income of $0.85 per share. By that measure, the company missed the mean analyst estimate of $0.85. It missed the average revenue estimate of $49.89 million.

Quoting Management: Mr. Garcia concluded, “We believe the prospects for new container investment in 2013 for CAI and the container leasing industry remain compelling. The second half of 2012 saw a limited amount of new container production, which we believe resulted in below normal industry-wide levels of new container inventory at the factories for this time of year. At the same time, we expect a recovery in global trade; Clarkson Research has estimated that containerized trade will grow by approximately 6% in 2013, as compared to a growth rate of 4% in 2012. Expected trade growth, continued high utilization levels of lessor fleets and our belief that many shipping companies will continue to have limited budgets for container purchases in the coming year, are all factors that we believe will lead to a strong market for our continued investment in new containers. We believe that a strong market for new container investment, combined with a continuation of opportunities for sale leasebacks with customers and the repurchase of managed portfolios, will lead to continued strong growth in revenue and profitability for CAI in 2013.”

Key Stats (on next page)…

Revenue increased 10.93% from $44.94 million in the previous quarter. EPS increased 1.19% from $0.84 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.9 to a profit $0.81. For the current year, the average estimate has moved down from a profit of $3.23 to a profit of $3.17 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)