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GATX's Q2 Earnings & Revenues Surpass Estimates, Rise Y/Y

GATX Corporation’s GATX second-quarter 2019 earnings (excluding 8 cents from non-recurring items) of $1.78 per share topped the Zacks Consensus Estimate of $1.32. Moreover, the bottom line improved significantly year over year. Results were aided by higher revenues.

Revenues came in at $359.4 million, marginally outpacing the Zacks Consensus Estimate of $358.9 million. The top line also inched up 2.8% year over year, mainly owing to higher Marine operating revenues and other revenues. Total expenses increased 3.1% to $277.1 million in the reported quarter.

GATX, carrying a Zacks Rank #3 (Hold), still anticipates 2019 earnings in the range of $4.85-$5.15 per share. The Zacks Consensus Estimate is currently pegged at $5.01, slightly above the mid-point ($5) of the guided range. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GATX Corporation Price, Consensus and EPS Surprise


GATX Corporation price-consensus-eps-surprise-chart | GATX Corporation Quote

Segment-Wise Results

Profits at the Rail North America segment increased to $85.8 million from $64.2 million a year ago. The improvement was mainly owing to higher gains on asset dispositions in the quarter under review. The renewal lease rate change of the company’s Lease Price Index (LPI) was 2.8% in the reported quarter compared with 16.1% a year ago. Additionally, average lease renewal term for cars included in the LPI was 53 months compared with 41 months in the year-earlier quarter.

In fact, Rail North America’s wholly-owned fleet had approximately 119,500 railcars at the end of the second quarter. Fleet utilization came in at 99.5% compared with 98.9% at the end of the year-ago quarter.

At the Rail International segment, profits surged 66.4% year over year to $21.3 million. Segmental profits benefited from additional railcars on lease.

Moreover, GATX Rail Europe’s fleet totaled approximately 24,000 railcars at the end of second-quarter 2019. Fleet utilization was 98.9% compared with 97.8% at the end of second-quarter 2018.

At the Portfolio Management unit, profits rose 4.4% to $11.9 million, driven by impressive performance of the Rolls-Royce and Partners Finance affiliates. Also, the American Steamship segment's profit soared 51.3% to $12.1 million in the quarter under review.

Upcoming Releases

Investors interested in the Zacks Transportation sector are keenly awaiting second-quarter 2019 earnings reports from key players, such as United Parcel Service UPS, SkyWest SKYW and American Airlines Group AAL. While UPS will report second-quarter earnings on Jul 24, SkyWest and American Airlines will announce the same on Jul 31 and Jul 25, respectively.

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