Thursday, October 24, 2013

GATX 3Q earnings beat Street

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Chicago-based GATX Corp. Thursday, Oct. 24, 2013 reported third-quarter net income of $53.8 million, or $1.15 per diluted share, compared with net income of $53.8 million, or $1.13 per diluted share, in the third quarter of 2012.

Revenue of $353.2 million edged higher than Wall Street consensus estimates of $351.6 million. Earnings per share also topped consensus forecasts of $1.09 per share.

The 2013 and 2012 third-quarter results include benefits from Tax Adjustments of $2.8 million, or six cents per diluted share, and Other Items, $18.2 million or 38 cents per diluted share.

Said GATX President and CEO Brian A. Kenney, "The demand for tank cars in North America remains strong. During the third quarter, the renewal rate change of GATX's Lease Price Index ("LPI") was a positive 34.3% and the average renewal term for cars in the LPI was 63 months. Freight car markets are uneven, although demand for grain and coal cars improved modestly from very low levels."

Kenney added, "Within Rail International, we sold our 37.5% interest in AAE Cargo AG during the quarter. GATX Rail Europe ("GRE"), our wholly-owned tank car leasing business, is now better positioned to pursue opportunities in the European freight car market. GRE continues to have solid performance as we are investing in new tank cars and aggressively scrapping older equipment. Fleet utilization was 96.3% at the end of the third quarter."

KeyBanc Capital Markets Inc. analyst Steve Barger, in a note to clients Thursday, said the report "supports the notion that the railcar leasing market remains favorable," and that GAXT "is effectively moving to capitalize on this strength by extending lease terms."