Earnings per share at GATX for the quarter surpassed analyst expectations despite declining from last year, as challenging conditions persist in the North American railcar leasing market.
Chicago-based global railcar lessor GATX Corp. reported a net income of $49 million for the third quarter of 2017, falling from $95.7 million for the third quarter of last year.
Earnings per share (EPS) of $1.25, which fell from $2.36 per share for last year’s third quarter, still surpassed analyst expectations, beating the Zacks estimate of $0.99 per share.
GATX noted that last year’s third quarter results included net after-tax gains of $34.6 million related to the exit of marine investments and other items.
Meanwhile, revenues for the third quarter of 2017 totaled $359.6 million, slipping 1 percent year-over-year.
The Rail North America segment recorded a profit of $70.2 million for the quarter, down 20.1 percent year-over-year due to a 3.2 percent year-over-year drop in revenues to $242.4 million and higher maintenance expenses. “Challenging conditions continue in the North American railcar leasing market due to the oversupply of existing railcars and a large manufacturing backlog,” GATX President and CEO Brian Kenney said.
As of Sept. 30, Rail North America’s wholly-owned fleet consisted of approximately 120,000 railcars, including about 16,600 boxcars.
Meanwhile, the Rail International segment had a $20.1 million profit for the quarter, slipping 13.7 percent year-over-year, as higher revenues were more than offset by lower insurance proceeds. The segment’s revenues rose 8.5 percent from last year’s third quarter to $52.3 million.
As of Sept. 30, GATX Rail Europe’s fleet consisted of approximately 23,000 railcars.
American Steamship Company, which operates a fleet of U.S.-flag vessels on the Great Lakes, recorded a segment profit of $12.1 million for the quarter, up 55.1 percent year-over-year thanks to cargo tonnage transport rising 12.6 percent year-over-year to 9.8 million net tons. However, this was partially offset by higher operating costs due to more vessels in operation. Revenues at American Steamship Company totaled $60.2 million for the quarter, up 14 percent year-over-year.
The Portfolio Management segment’s profit totaled $12.8 million for the quarter, down from $64.1 million for the third quarter of last year, primarily due to a residual sharing fee settlement of $49.1 million received in 2016. Meanwhile, the segment’s revenues totaled $4.7 million for the quarter, down from $11.6 million a year prior.
GATX posts sluggish Q3 results amid challenging railcar leasing market
