GATX Earnings Preview

GATX (NYSE: GMT  ) will look to avoid missing estimates for the third consecutive quarter when its earnings are released. The company will unveil its latest earnings Thursday. GATX leases, operates and manages long-lived, widely used assets in the rail, marine, and industrial equipment markets. It also invests in joint ventures that complement existing business activities.

What analysts say:

  • Buy, sell, or hold?: Analysts are bullish on GATX as three analysts rate it as a buy and only one analyst rates it as a sell. Analysts don't like GATX as much as competitor RailAmerica overall. Analysts still rate the stock a hold, but they are a bit more wary about it compared with three months ago.
  • Revenue Forecasts: On average, analysts predict $338.5 million in revenue this quarter. That would represent a rise of 7.7% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.61 per share. Estimates range from $0.58 to $0.65.

What our community says:
CAPS All-Stars are solidly behind the stock with 91.7% awarding it an "outperform" rating. The community at large backs the All-Stars with 88.9% granting it a rating of "outperform." Fools are keen on GATX, though the message boards have been quiet lately with only 27 posts in the past 30 days. Though still bullish, the CAPS rating of four out of five stars for GATX is a bit more pessimistic than the community assessment.

Management:
GATX's profit has risen year over year by an average of 6.9% over the past five quarters. Revenue has now gone up for three straight quarters. The company raised its gross margin by 2.4 percentage points in the last quarter. Revenue rose 11.8% while cost of sales rose 6.1% to $143.3 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

56.5%

60.0%

36.2%

54.1%

Operating Margin

27.8%

28.6%

19.0%

22.1%

Net Margin

8.0%

7.1%

6.2%

6.7%

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