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GATX Q3 Earnings Surpass Estimates, Revenues Increase Y/Y

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GATX Corporation’s GATX third-quarter 2021 earnings of $1.11 per share surpassed the Zacks Consensus Estimate of $1.

Total revenues of $313.5 million inched up approximately 3% year over year, mainly due to 3.9% rise in lease revenues to $283.9 million. Lease revenues contributed 90.6% to the top line. Marine operating revenues contributed 1.6% to the top line. The balance came from other sources. Total expenses (on a reported basis) inched up 3.2% to $233.6 million.

For 2021, the company continues to expect earnings in the range of $4.30-$4.50 per share. The mid-point of the guided range — $4.40 — is in line with the Zacks Consensus Estimate.

GATX Corporation Price, Consensus and EPS Surprise

GATX Corporation Price, Consensus and EPS Surprise
GATX Corporation Price, Consensus and EPS Surprise

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

Segmental Details

Profits in the Rail North America segment improved 18.5% year over year to $66.5 million. The upside was primarily led by higher gains on asset dispositions and lower maintenance expenses. The renewal lease rate change of the company’s Lease Price Index (“LPI”) was 8.1% in the reported quarter against the year-ago quarter’s -29.4%. Average lease renewal term for cars included in the LPI was 32 months compared with 29 months in the year-ago quarter.

Rail North America’s wholly-owned fleet had approximately 114,200 rail cars at the end of Sep 30, 2021. Fleet utilization was 99.2% compared with 98.2% at the end of third-quarter 2020.

In the Rail International segment, profits rose 12.5% year over year to $27 million in the third quarter. Results were primarily driven by more railcars on lease.

GATX Rail Europe’s fleet totaled more than 26,800 rail cars at the end of the quarter. Fleet utilization was 98.1% in the reported quarter, compared with 98.2% at the end of the third quarter of 2020.

The Portfolio Management unit reported a segmental profit of $6.2 million in the September quarter, down 86% year over year due to lower share of affiliates’ earnings from the Rolls-Royce and Partners Finance affiliates, among other factors.

Liquidity

GATX, carrying a Zacks Rank #3 (Hold), exited the third quarter with cash and cash equivalents of $566 million compared with $292.2 million at the end of 2020.

Sectorial Snapshots

Within the broader Transportation sector, Delta Air Lines DAL, J.B. Hunt Transport Services JBHT and Kansas City Southern KSU recently reported third-quarter 2021 results.

Delta, currently carrying a Zacks Rank #4 (Sell), reported third-quarter earnings (excluding $1.59 from non-recurring items) of 30 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Revenues of $9,154 million also beat the Zacks Consensus Estimate of $8,370.6 million.

J.B. Hunt, presently carrying a Zacks Rank #2 (Buy), reported third-quarter earnings of $1.88 per share, surpassing the Zacks Consensus Estimate of $1.77. Total operating revenues of $3144.8 million outperformed the Zacks Consensus Estimate of $3002.1 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Kansas City Southern, carrying a Zacks Rank #5 (Strong Sell) at present, reported third-quarter earnings (excluding 31 cents from non-recurring items) of $2.02 per share, missing the Zacks Consensus Estimate of $2.07. Quarterly revenues of $744 million, however, surpassed the Zacks Consensus Estimate of $725.9 million.


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