GATX Earnings: Here’s Why the Stock is Up Now

GATX Corp. (NYSE:GMT) 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 0.72%.

GATX Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 15% to $0.68 in the quarter versus EPS of $0.80 in the year-earlier quarter.

Revenue: Decreased 0.82% to $338.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: GATX Corp. reported adjusted EPS income of $0.68 per share. By that measure, the company missed the mean analyst estimate of $0.85. It missed the average revenue estimate of $342.76 million.

Quoting Management: Brian A. Kenney, president and chief executive officer of GATX, said, “The demand for tank cars in North America continues at record levels, and we are capitalizing on this by increasing lease rates and lengthening lease terms. At the same time, we are keeping terms shorter for certain freight car types such as coal, where demand is weaker. This strategy resulted in an average renewal term of 58 months for cars in the LPI during the quarter, a shorter term than we have reported over the past year. During the quarter, the renewal rate change of GATX’s Lease Price Index (“LPI”) was a positive 36.0%, the highest quarterly result since we began calculating this statistic in 2005. Rail North America’s utilization remained strong at 98.2% at the end of the second quarter.”

Key Stats (on next page)…

Revenue increased 24.46% from $272.3 million in the previous quarter. EPS increased 13.33% from $0.60 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.88 to a profit $0.92. For the current year, the average estimate has moved down from a profit of $3.21 to a profit of $3.19 over the last ninety days.

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