GATX Corp. (GATX) Tops Q2 EPS by 11c, Revenues Miss

GATX Corp. (NYSE: GATX) reported Q2 EPS of $1.05, $0.11 better than the analyst estimate of $0.94. Revenue for the quarter came in at $300.5 million versus the consensus estimate of $331.4 million.

• Net income from continuing operations for the second quarter 2020 was $37.0 million or $1.05 per diluted share
• Rail North America’s fleet utilization remained high at 98.7%

“In the second quarter, COVID-19 and its effect on the global economy negatively impacted all of our business segments,” said Brian A. Kenney, president and chief executive officer of GATX. “Despite the difficult business conditions, our Rail North America team continued to effectively deploy railcars on lease and displace competitors, resulting in a renewal success rate of 71.8% and fleet utilization of 98.7% at quarter-end. However, as customers right-size their fleets, railcar lessors are competing aggressively to place both new deliveries and their existing idle railcars, resulting in significant pressure on lease rates. In the second quarter, the renewal lease rate change of GATX’s Lease Price Index was negative 28% and the average renewal term was 31 months.

“Rail International performed well. GATX Rail Europe continued to experience small lease renewal rate increases and fleet utilization remains strong at 98.4%. However, the pace of new railcar investments in both Europe and India was constrained due to pandemic-related shutdowns at railcar manufacturing facilities. In the Portfolio Management segment, our Rolls-Royce and Partners Finance affiliates produced solid financial results against a challenging backdrop in the global aviation industry.”

Mr. Kenney added, “Investment volume was over $210 million in the quarter. With a strong balance sheet, GATX continues to have the capacity and willingness to invest at attractive valuations.”

Mr. Kenney concluded, “Looking ahead, we expect pressure on lease rates, renewal activity, and asset utilization across our business segments as impacts from the COVID-19 pandemic continues. Given the highly uncertain global outlook and lack of near-term visibility, we are not reinstituting guidance for 2020 at this time.”

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

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