GATX Corp. (GATX) Tops Q1 EPS by 9c, Revenues Miss

GATX Corp. (NYSE: GATX) reported Q1 EPS of $1.31, $0.09 better than the analyst estimate of $1.22. Revenue for the quarter came in at $308.9 million versus the consensus estimate of $310.3 million.

• Net income for the first quarter 2020 was $46.3 million or $1.31 per diluted share
• GATX suspends 2020 guidance due to uncertainties related to the COVID-19 pandemic
• Rail North America’s fleet utilization remained strong at 99.0%

“GATX posted solid first-quarter results despite continuing weakness in the North American railcar leasing market and a deteriorating global economy,” said Brian A. Kenney, president and chief executive officer of GATX. “During this unprecedented time, our focus has been on ensuring the health and safety of our global workforce and serving our customers with minimal disruptions.

“Rail North America’s performance in the quarter was generally consistent with our expectations coming into 2020. We achieved fleet utilization of 99% at the end of the quarter and a renewal success rate of 74.6%. The renewal lease rate change of GATX’s Lease Price Index was negative 11.6% in the quarter, with an average renewal term of 31 months.

“Rail International performed as expected. Fleet utilization at GATX Rail Europe remains high at 98.5% at quarter end, and GATX Rail India grew its fleet to over 3,900 railcars while maintaining utilization at 100%. Within Portfolio Management, our Rolls-Royce and Partners Finance affiliates produced favorable results, despite an unprecedented drop in commercial air travel in the latter part of the quarter. Finally, American Steamship Company’s sailing season began at the end of March with seven of the planned 11 vessels currently deployed in anticipation of lower tonnage due to COVID-19 impacts. The sale of American Steamship Company is expected to close in the second quarter.”

Mr. Kenney added, “While the impact of the COVID-19 pandemic on our first-quarter results was limited, we expect future operating results to be negatively impacted, the magnitude of which is highly uncertain and depends on many factors that continue to evolve rapidly, including the scope and duration of the pandemic’s disruptions and the shape and timing of the eventual recovery. Accordingly, we are suspending our previously announced full-year 2020 guidance.”

Mr. Kenney concluded, “I am grateful for the dedication and resilience of our employees in the face of the current obstacles. The challenges posed by the COVID-19 pandemic are extraordinary and unparalleled. However, GATX has managed through a number of crises and economic cycles during its 120-plus-year history. We entered the current crisis with a strong balance sheet, excellent liquidity, and committed long-term leases that provide a source of stable cash flows—all of which we expect positions GATX to navigate through this difficult period and capitalize on attractive investment opportunities that may arise.”

For earnings history and earnings-related data on GATX Corp. (GATX) click here.

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