GATX Q4 Earnings Surpass Expectations, Revenues Fall Short
GATX Corporation’s GATX fourth-quarter 2022 earnings of $1.54 per share outpaced the Zacks Consensus Estimate of $1.38. The bottom line fell 2.5% year over year. Revenues of $322.7 million missed the Zacks Consensus Estimate of $328.9 million but improved 0.5% year over year.
Lease revenues of $294 million grew 1.9% year over year, while Marine operating revenues decreased 50% to $2.7 million. Revenues from other sources fell 4.4% to $26 million.
GATX Corporation Price, Consensus and EPS Surprise
GATX Corporation price-consensus-eps-surprise-chart | GATX Corporation Quote
Total expenses (on a reported basis) declined by $15.1 million to $233.1 million.
Profits in the Rail North American segment increased to $83.5 million from $75.6 million a year ago. The renewal lease rate change of GATX’s Lease Price Index (LPI) was 29.7% in the reported quarter compared with the year-ago quarter’s -0.7%. The average lease renewal term for cars included in the LPI was 34 months compared with 37 months a year ago.
Rail North America’s wholly-owned fleet consisted of approximately 109,600 rail cars at the end of Dec 31, 2022. Fleet utilization was 99.5% compared with 99.6% at the end of third-quarter 2021.
In the Rail International segment, profits fell 37% year over year to $18.2 million in the fourth quarter. Results were unfavorably impacted by foreign currency exchange rate fluctuations, partially offset by more railcars on lease.
GATX Rail Europe’s fleet totaled around 27,658 rail cars at the end of the quarter. Fleet utilization was 99.3% in the reported quarter compared with 98.7% at the end of fourth-quarter 2021.
The Portfolio Management unit reported a segmental profit of $23.1 million in the fourth quarter compared with $36.3 million in the year-ago quarter.
As of Dec 31, 2022, GATX had cash and cash equivalents of $303.7 million compared with $596.3 million at the end of September 2022.
GATX anticipates full-year 2023 earnings guidance of $6.50-$6.90 per share. The Zacks Consensus Estimate of $6.58 lies within the guidance.
For 2023, GATX anticipates the railcar leasing environment in North America to remain favorable. Rail International’s 2023 segment profit is likely to rise as solid demand for new and existing railcars continues in Europe and India. Coupled with increased earnings from GATX Engine Leasing, Portfolio Management is expected to generate higher segment profit in 2023
Currently, GATX carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Transportation Companies
United Airlines’ UAL fourth-quarter 2022 earnings of $2.46 per share beat the Zacks Consensus Estimate of $2.07. In the year-ago quarter, UAL incurred a loss of $1.60 per share when air-travel demand was not as buoyant as in the current scenario. The fourth quarter of 2022 was the third consecutive profitable quarter at UAL since the onset of the pandemic.
Operating revenues of $12,400 million beat the Zacks Consensus Estimate of $12,230 million. UAL’s revenues increased 51.37% year over year owing to upbeat air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.9% from fourth-quarter 2019 (pre-coronavirus) levels.
Delta Air Lines’ DAL fourth-quarter 2022 earnings (excluding 19 cents from non-recurring items) of $1.48 per share beat the Zacks Consensus Estimate of $1.29 per share. DAL reported earnings of 22 cents per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $13,435 million, which also surpassed the Zacks Consensus Estimate of $13,030.3 million. Driven by the high air-travel demand, total revenues increased more than 41.87% on a year-over-year basis.
J.B. Hunt Transport Services, Inc.’s JBHT fourth-quarter 2022 earnings of $1.92 per share missed the Zacks Consensus Estimate of $2.45 and declined 16% year over year.
JBHT’s total operating revenues of $3,649.62 million also lagged the Zacks Consensus Estimate of $3,796.8 million. The top line jumped 4.4% year over year. Total operating revenues, excluding fuel surcharges, fell 2.9% year over year.
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