CAI International Earnings: Here’s Why the Stock is Up Now

CAI International Inc. (NYSE:CAP) delivered a profit and missed 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 up 0.19%.

CAI International Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 2.6% to $0.75 in the quarter versus EPS of $0.77 in the year-earlier quarter.

Revenue: Rose 33.4% to $53 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: CAI International Inc. reported adjusted EPS income of $0.75 per share. By that measure, the company missed the mean analyst estimate of $0.83. It missed the average revenue estimate of $54.46 million.

Quoting Management: Victor Garcia, Chief Executive Officer of CAI, commented, “Our results this quarter are consistent with our outlook in the first quarter conference call, when we had indicated delayed inquiries for new containers from shipping lines. However, as the second quarter progressed, customer inquiries increased and we experienced an increase in the lease-out of new equipment. Nonetheless, overall trade growth has not reached expected levels and consequently demand for new equipment has been weaker than we expected, resulting in a competitive rate environment. Despite the level of competition, we have been able to find attractive opportunities for investment. To date, we have invested in $265 million of equipment, approximately half of which has been portfolio repurchases and sale-leasebacks. Over the past three months, we have seen an increase in the level of railcar investment opportunities and at the moment we have a pipeline of $24 million of transactions that we expect to add to our rail fleet during the third quarter. These investments are largely in equipment on long-term leases at attractive lease rates. We expect to make additional railcar asset acquisitions over the remainder of the year.”

Key Stats (on next page)…

Revenue increased 4% from $50.96 million in the previous quarter. EPS increased 0% from $0.75 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 $0.93 to a profit $0.92. For the current year, the average estimate has moved down from a profit of $3.52 to a profit of $3.47 over the last ninety days.

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