), leading railcar leasing company, reported first-quarter 2014
adjusted earnings of 82 cents per share, beating the Zacks
Consensus Estimate of 74 cents. The results showed a massive
improvement from adjusted earnings of 60 cents a year ago.
Adjusted earnings for the reported quarter excluded the impact
of benefits from tax adjustments and other items of $3.5 million
(8 cents per share).
Revenues increased 5.3% year over year to $286.6 million,
below the Zacks Consensus Estimate of $291 million.
Operating expenses increased to $223.0 million from $220.8
million in the year-ago quarter.
Profit from the
Rail North America
segment increased to $75 million in the first quarter from $50.3
million in the year-ago quarter driven by higher lease rates and
asset remarketing activities.
GATX' Lease Price Index (LPI) improved substantially to 33.9%
from 30.8% in the year-ago quarter. Further, the term of lease
renewals was 62 months versus 65 months in the comparable quarter
The North American fleet totaled approximately 108,361 cars
compared with 109,637 cars at the end of first-quarter 2013.
Fleet utilization increased to 98.5% from 97.8% in the year-ago
Profit from the
segment was $20.7 million compared with adjusted income
(excluding the negative impacts of $1.4 million in pre tax and
other items) of $20.0 million in the year-ago quarter. The growth
was driven by higher lease revenue based on increased numbers of
leased railcars and higher lease rates.
Rail International fleet totaled approximately 21,774 compared
with 22,012 in the year-ago quarter. Fleet utilization was 95.8%
versus 93.4% in the year-earlier quarter.
was $11.9 million in the first quarter against $12.5 million in
the year-ago quarter. The decline in profits was due to lower
asset remarketing income that clouded the gains from the
The segment currently comprises approximately $855 million
worth of owned assets and third-party managed portfolios worth
approximately $111 million.
Loss from the
American Steamship Company
(ASC) segment was $1.2 million compared to profit of $0.8 million
in the year-ago quarter. Seasonal impacts of winter were
primarily responsible for the decline in profits.
The company exited the first quarter with cash and cash
equivalents of $447 million compared with $379.7 million in
GATX expects its full-year 2014 earnings in the range of $4.15
to $4.35 per diluted share, higher than previously estimated
$3.85-$4.05 per share.
We expect market fundamentals to continue to improve in 2014
for GATX, supporting higher lease rates, carloads, increased
asset utilization and remarketing opportunities. The company
remains focused on expanding its asset base to enhance its
long-term performance. Further, the tie-up with Rolls Royce is
generating strong results, strengthening GATX' competitive
GATX carries a Zacks Rank #2 (Buy).
Other stocks worth considering in this sector include
American Railcar Industries, Inc.
Trinity Industries Inc.
CAI International Inc.
). While American Railcar and Trinity Industries sport a Zacks
Rank #1 (Strong Buy), CAI International has a Zacks Rank #2.
AMER RAILCAR (ARII): Free Stock Analysis
CAI INTL INC (CAP): Free Stock Analysis
GATX CORP (GMT): Free Stock Analysis Report
TRINITY INDS IN (TRN): Free Stock Analysis
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