), a leader in leasing transportation assets, reported adjusted
second-quarter 2013 earnings of 68 cents per share, missing the
Zacks Consensus Estimate of 85 cents. The earnings reflected 15%
deterioration from 80 cents reported in the year-ago quarter.
Adjusted earnings for the second quarter excluded the unfavorable
impacts of benefits from tax adjustments and other items of $3
million (6 cents per share).
Revenues increased 4.9% year over year to $338.9 million but
missed the Zacks Consensus Estimate of $344 million. Operating
Profits decreased to $57.4 million from $62.9 million in the
year-ago quarter. Total operating expenses (including ownership
cost, and other costs and expenses) increased to $281.5 million
from $260.2 million in the year-ago quarter.
Profit from the Rail North America segment decreased to $48.2
million in the reported quarter from $53.2 million in the
GATX' Lease Price Index (LPI) improved substantially to 36% from
23.9% in the year-ago quarter. Further, the term of lease
renewals decreased to 58 months from 59 months in the comparable
quarter last year.
The North American fleet totaled approximately 111,000 cars
compared with 109,187 cars at the end of second-quarter 2012.
Fleet utilization decreased to 98.2% from 98.3% in the year-ago
Adjusted profit from the Rail International segment was $24.4
million, up from a loss of $3.6 million in the year-ago quarter.
Adjusted income excluded the impact of $3.3 million and $16.3
million related to both positive and negative pre-tax adjustment
and other items for second-quarter 2013 and 2012, respectively.
The European wholly owned tank car fleet totaled approximately
22,000 compared to 21,209 in the year-ago quarter. Fleet
utilization was 95.8% versus 96.3% in the year-earlier quarter.
Profit from Portfolio Management was $17.3 million compared with
$14.6 million in the year-ago quarter. The segment currently
comprises approximately $828 million of owned assets (including
on and off balance sheet assets) and third-party managed
portfolios of approximately $129.1 million.
Profit from the American Steamship Company (ASC) segment was
$10.1 million compared with $14 million in the year-ago quarter.
The company exited the second quarter with cash and cash
equivalents of $96.7 million compared with $234.2 million in
GATX raises its full-year 2013 earnings estimates at $3.20 to
$3.30 per share.
We expect market fundamentals to continue to improve in 2013,
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 also
generating strong results, strengthening GATX's competitive
position against rivals.
The company currently retains a Zacks #3 (Hold).
Other Stocks to Consider
Other stocks worth considering within the sector are
Westinghouse Air Brake Technologies Corporation
Trinity Industries Inc.
The Greenbrier Companies, Inc.
). Westinghouse has a Zacks Rank #2 (Buy) while the other two
stocks have a Zacks Rank #3 (Hold).
(We are reissuing this article to correct two mistakes. The
original article, issued Friday, Jan 25, 2013, should no longer
be relied upon.)
GREENBRIER COS (GBX): Free Stock Analysis
GATX CORP (GMT): Free Stock Analysis Report
TRINITY INDS IN (TRN): Free Stock Analysis
WABTECH (WAB): Free Stock Analysis Report
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