Wednesday, 25 January 2017 08:15 AM
Upcoming AWS Coverage on Ryder System Post-Earnings Results
LONDON, UK / ACCESSWIRE / January 25, 2017 / Active Wall St. announces its post-earnings coverage on GATX Corp. (NYSE: GATX). The Company disclosed its fourth quarter and fiscal 2016 results on January 19, 2017. The equipment finance Company's earnings and revenue declined a y-o-y basis, but still exceeded analysts' expectations. Register with us now for your free membership at:
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One of GATX's competitors within the Rental & Leasing Services space, Ryder System, Inc. (NYSE: R), announced on January 11, 2017, that it will schedule its earnings conference call scheduled for February 2, 2017, at 11:00 a.m. ET. During the call, the Company's management will review Q4 and full-year 2016 results, as well as provide an outlook for 2017. AWS will be initiating a research report on Ryder System in the coming days.
Today, AWS is promoting its earnings coverage on GATX; touching on R. Get our free coverage by signing up to:
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http://www.activewallst.com/registration-3/?symbol=R
Earnings Reviewed
For the three months ended December 31, 2016, GATX reported revenue of $362.1 million during the period compared to revenue of $378.7 million in the year ago same period and exceeded analysts' forecasts of $359.8 million. For FY16, the Company reported of $1.42 billion compared to revenue of $1.45 billion for FY15.
GATX reported Q4 2016 net income of $30.9 million or $0.77 per diluted share compared to net income of $58.2 million, or $1.37 per diluted share, in Q4 2015. The reported quarter and the year earlier same quarter included net negative impacts from Tax Adjustments and Other Items of $0.37 per diluted share and $0.07 per diluted share, respectively. On an adjusted basis, the Company reported earnings of $1.14 per shares, surpassing Wall Street's expectations of $1.05 per share. GATX' net income for FY16 was $257.1 million, or $6.29 per diluted share, compared to $205.3 million, or $4.69 per diluted share, in the prior year.
Segment Results
During Q4 2016, GATX's Rail North America reported segment profit of $48.5 million compared to $98.8 million in Q4 2015. For FY16, Rail North America reported segment profit of $321.9 million compared to $379.5 million in FY15.
At December 31, 2016, GATX's Rail North America's wholly owned fleet was approximately 122,000 cars, including more than 17,700 boxcars. Fleet utilization was 98.9% at the end of Q4 2016 compared to 99.0% at the end of Q3 2016 and 99.1% at 2015 year end. During the reported quarter, the GATX Lease Price Index ("LPI"), a weighted average lease renewal rate for a group of railcars representative of Rail North America's fleet, showed a negative 36.2% renewal rate change compared to negative 21.4% in Q3 2016 and positive 20.5% in Q4 2015. The average lease renewal term for all cars included in the LPI during Q4 2016 was 29 months compared to 29 months in the prior quarter and 43 months in the year earlier comparable quarter. The Company's Q4 2016 renewal success rate was 64.7% compared to 74.1% at the end of Q3 2016 and 81.8% at 2015 year end. For FY16, the LPI was negative 20.3% and the average renewal term was 32 months compared to positive 32.2% and 54 months in FY15.
Rail International
For Q4 2916, GATX's Rail International segment profit improved to $14.1 million compared to $13.7 million in Q4 2015. For FY16, Rail International reported segment profit of $63.0 million compared to $70.1 million in FY15. GATX Rail Europe's fleet consisted of approximately 23,100 cars and utilization was 95.6% in the reported quarter compared to 95.0% at the end of Q3 2016 and 95.8% at 2015 year end.
American Steamship Co.
GATX's American Steamship Company (ASC) reported a segment loss of $2.8 million in Q4 2016 compared to segment profit of $1.7 million in Q4 2015. Segment profit for FY16 was $10.1 million compared to $15.1 million in FY15. In Q4 2016, ASC reported $5.0 million of expense related to an increased accrual for pending litigation and costs associated with the scheduled return of a leased vessel in 2017.
ASC operated 11 vessels during FY16 and carried approximately 25.4 million net tons of cargo compared to 13 vessels which carried 26.5 million net tons in FY15. The decrease in tonnage and segment profit was driven by reduced coal and limestone demand.
Portfolio Management
During Q4 2016, GATX's Portfolio Management reported segment profit of $17.7 million compared to $40.9 million in Q4 2015. The decline in profit was attributed to lower gains on asset dispositions and lower income from Rolls-Royce Partners Finance ("RRPF") affiliates due to timing of engine dispositions. For FY16, Portfolio Management reported segment profit of $136.9 million compared to $49.8 million in 2015.
Cash Flow & Balance Sheet
As of December 31, 2016, GATX Corp. had cash and cash equivalents of $307.5 million compared to $202.4 million as of December 31, 2015. In 2016, GATX repurchased over 2.7 million shares for approximately $120 million compared to its FY15 repurchase activity of 2.4 million shares for approximately $125 million. As of December 31, 2016, the Company had approximately $180 million remaining under its existing $300 million repurchase authorization.
Stock Performance
On Tuesday, January 24, 2017, the stock closed the trading session at $59.85, rising 1.12% from its previous closing price of $59.19. A total volume of 581.97 thousand shares have exchanged hands, which was higher than the 3-month average volume of 493.59 thousand shares. GATX's stock price rallied 29.19% in the last three months, 39.04% in the past six months, and 67.14% in the previous twelve months. The Company's shares are trading at a PE ratio of 8.67 and have a dividend yield of 2.67%.
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