GATX - Earnings call transcript Q1 2024

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Operator

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the GATX Corporation First Quarter 2024 Earnings Conference Call. [Operator Instructions]I would now like to turn the conference over to Shari Hellerman, Head of Investor Relations for GATX Corporation. Please go ahead.

Shari Hellerman

Dennis. you, Thank thank Earnings and joining XXXX GATX's Good you Quarter Call. First morning for today President Chief I'm Officer; Bob by joined Lyons, Ellman, Vice and and Executive President Officer. and Financial Tom Executive Chief

today differ some reminder, Actual you'll our forward-looking the As those will trends statements a of could of consist or from hear information during discussion materially results forecasts. statements. or

and release the elsewhere and the assumes please to information, any circumstances. included factors or more XX-K to risk for our forward-looking events refer Form in to XXXX discussed filings SEC. those no our update For in obligation statements GATX's earnings or subsequent in GATX reflect to revise

are million The results net impact adjustments $X.X share. per first detailed or release. The items $X.X and or in included from Shareholders' format. first section at million share virtual-only our or $XX.X Time I per diluted XXXX GATX supplemental items. in positive first XXXX quarter to diluted everyone meeting $X.XX like our of items. XXXX a earnings diluted results, $X.XX quarter Meeting other held a X:XX per $XX.X and of the net of on $X.XX will million Earlier I'd and of share These be Annual income quarter remind is million first April or negative quarter Friday, income included today, impact results adjustments from net a.m. compares tax net of This other a recap Before scheduled reported $X.XX provide Central tax per quarter information XX, of first diluted to a our quick that XXXX share.

well, into Rail environment results expectations with and the utilization line at year. end XX.X% very continues of the first North GATX first the in the to our were perform quarter. fleet quarter of Our operating with America coming

renewal remained success XX.X%. very also at Our rate high

renewal rate terms. average term to price lease renewal change for while index very was also rate XX% of was the The renewal strong months. increases lease and achieve positive GATX's XX continue We extending quarter, the

place we Additionally, customer continue from base. supply railcars agreements new a to our diverse successfully with committed

We our our supply agreement. X,XXX Greenbrier from agreement. all railcars supply our have XXXX placed we've from XXXX And railcars placed X,XXX Trinity

In our over agreement. X,XXX railcars placed addition, Trinity supply we've XXXX from

Our the earliest delivery available the under first agreement supply of scheduled in is quarter XXXX.

the quarter, $XX and North million in selectively asset income. also railcars remarketing sold generated During we in America

expect a total experience of India over to X,XXX types. between had the renewal GATX and lease of new in for Europe Rail remarketing We across the Rail pushing market be start quarters to income the Europe and balance most quarter. secondary evenly Both during success up and a with anticipate the solid year cars stable and International Rail rates for remain paced to utilization delivered robust India car to XXXX. first continue

As we of engine segment to leasing portfolio to forward. noted going operations the in release, the business management segment we've this our reflect renamed

performing Leasing, open in overview, strong well ventures to entirely now from lineup air our and our are owned engine with travel. that the we sparing with comprises international for can leasing fully Rolls-Royce segment and RRPF, Engine the the In activity. As quick questions. passenger joint And growth portfolio in aircraft continuing benefit

Operator

Instructions]. [Operator

line the question first Cowen. Your TD from Elkott is of Matt with

Matthew Elkott

and you absolute in how they've lease rates Can talk about guys quarter? trended the the

Robert Lyons

rates one. course the or over in the year's first keep Whether quarter, in that versus the lease substantial years. a had take flat. mind; relatively quarter I'll Bob. But of really it's increase fourth couple it's of last Matt, again, last we've

today. for based renewals, stay rates in uplift very they're to on at where if outlook So XX%. just they hence have the a the positive see coming leveled off level, continue at attractive we'll And very at LPI

Matthew Elkott

stay will Bob, you think levels, the is some do improving if that, Or current they doing well? and there pressure? at you think be be seems given opinion? as velocity Regarding what's to rail could your traffic what downward Do

Robert Lyons

see Well, right I right up. don't see rates any anything don't likewise, a we now. spike making really for catalyst downward for lipids pressure And

into was So at it consistently our they'll the and expectation at level expectation we and had is year the the year. this coming through level this that be

Thomas Ellman

stays this activity there type, car see in you'll weakness increase, notice and Tom. is when to so Matt, a some One that that thing scrapping tending particular is that you're is supply in demand balance.

Matthew Elkott

expecting expecting the have given of expectations year? been for for those was it pretty remarketing the changed end the you XQ in coming income, the remarketing what still solid on then expectations at the quarter, had the And you Or Are guys full into year. income?

Robert Lyons

every $XX live to and still lot a It's lot expect a market really the we difficult thing. of it to we of know, Matt different have or we do, $XXX quarter-to-quarter. out beginning at to to different And transactions, in estimate pin to most thing assets as million trying of always year. laid the do to that that driven to you is of the difficult predict economic and predict range, be and It's million We to difficult remarketing most is to those day. we're down quarter-to-quarter timing the the

be quarter-by-quarter, laid we year. out them we coming lay to tough the range fully out to but the it's into So expect

Matthew Elkott

Where the the Where share first just a one million. Is $X come annualize $XXX just from? it year, be the for quarter, high it we and going is here? for over the we you'll the see variable Is then your question. of end And to income? is remarketing should rest earnings guidance but last subsiding If year? of your the

Robert Lyons

we remarketing out the we we'd year, at be from range remarketing the Because above the the gave well the It beginning annualize the on beginning the if would of year. guidance impact first expect we within the we the be at side. quarter, laid of to be and

Operator

line Justin Your is next question of from Stephens. with the Long

Justin Long

to on a of versus you of anticipating change level segment what helpful last the It's XXXX the some get and did start guidance to the from the on But know the were ranges year? quarter, didn't start by perspective, expectations. expectations. And change anything income but question. clarity segment an lot you gave guidance that remarketing detailing level last overall I EPS at on at

Robert Lyons

not No, really.

As look through in segment. year and first what quarter, planned, the the use of the we balance I occurred look out across uneventful, to to that's the as but word And better the way every at it. hate

Justin Long

could on is volume of And just we curious I question any investment if seeing on updated the second And see in the comment pipeline level you in opportunities. could you're what thoughts around investment was today? XXXX?

Thomas Ellman

we're similar see on And billion. that at did first we is were in year, you $X.X year pace coming right the we in quarter, to So for our XXXX expectations investment into levels $XXX the that remain that if look and we the happened expected range. where million, what

Operator

Bascome the with of Your next from question Susquehanna. Majors is line

Bascome Majors

Or market you that prepared there difficulty year this It's and to in Is you've that to income. remarketing a typically cadence be what market qualitatively since ago? closed? Can that. is that remarks managing different America the any back mentioned in been the your you versus you come done in a North something deal bit And I how than to about if months lumpy is X, just about types of there's wanted the function been the thought today predict tenor the and into fairly when the shift talk depths little just of past? and you're the more would even. books X

Robert Lyons

out sales, a sales many, I'll book buyer. to of We many a lumpiness timing buyers. occurs that individual one. sales Bascome, transactions. don't small take The cars [indiscernible] lot because and do different put to of one the of sell We

So certainly of not into to is in those a going and And quarter it sense. we're not those given getting to time make to predict force all frame do. particular when up line economic might difficult a anything

quarter we the or whether get best quarter, for economic something third the in become we So shareholder. indifferent, want we the outcome second

of overall, feels terms good. the In market it really

into based rates packages it remains it's the when were and we group. buyer when that it the we happen in certainly a it We thought And market year, but We first on off little taper said bit rise, we XXXX, secondary broad The interest active, healthy, the didn't interest because from the incredibly a came deep robust. pretty putting of get might don't happening on see didn't and happen, we're out. in quarter. that level

by encouraged that. we're So

Bascome Majors

And could follow-up. I if a ask

You segment, finally third engine focus officially renamed the leasing reflect there. to your

in to perhaps growth in-house? in to partner of your JV Or the transformation, at more longer the there of bring further maybe be term you? restructure As economics it economics more side opportunity JV continues XXX% and will its come an that just incremental business gets to that is ownership of along some

Robert Lyons

year the continue, to the out going to directly. laid of as we invest beginning at We're

this expect million year. $XX be investment million in owned very level million, directly the undertaking. that again of Again, are to those at lumpy $XXX We $XX engines each end range

those predicting we the the year million a Then venture, investment encouraging. and up roughly on sharply working the But this saw venture activity be to level quarterly basis $XXX million itself, they tough. at we is last same very pretty that can investment year, are see did last within joint on which volume within So we of joint $XXX going year.

more after through growth crisis. returning portfolio they're mode much COVID the So the managing to a

for future, it's contemplating. that's been very of and restructuring we're in joint terms venture form. for works In a certainly, current XX-plus years in the now venture the well beneficial the parties, both it joint not And something

Operator

of is from Justin Bergner Your Funds. Gabelli line next the question with

Justin Bergner

that seems whereby to some are these that on question basis, Can comment sequential relates to softness cars rate First seeing being offsetting are for a be on you that? elaborate types there more your of this railcar scrapped. lease dynamic

Thomas Ellman

of that velocity. a might to whole need a them, the question that's talking do pick excess lessor as so had the up if What in has any and to lease to and actually strong. given is see type tended balance And Matt's where car lease scrap market for something remains I cars about Justin, tends with terms wasn't rates. rates a less referring in velocity to you to were stay market of

Justin Bergner

the a of being a that car? function scrapping for rate outlook in type scrap take justify to the such just the still change that that it is doesn't meaningful compelling And car

Thomas Ellman

Yes.

of hanging feature any basis. cars incremental on because the a of prices And scrap So challenges are the strong it's of getting just to kind both people cars. are on historical

need of their So it's of being what end cars don't people up of towards until we and life determine something those some comes held on are to case few. a a the more

Justin Bergner

joint remarketing worth of any there Is And income last just dynamics respect in recent function equity a that out? quarter. other dropped I the guess, Is to with venture, some to this venture? lower quarters, joint income quarter compared segment particularly the the the calling

Thomas Ellman

for quarter, was In it amount of the similar for remarketing. or and remarketing quarter XX% JV about was the But the So the cases, income what full of versus mix were absolute year income the about was was fourth the $X bit, 'XX. first million gains a dollar XX% so. down very to operating of about both

Justin Bergner

upside the the it far is So your just drove a according venture surprise segment I clear, XXXX, well? of to broader in lot delivering leasing to XXXX be engine plan, guess, while joint the as in so

Thomas Ellman

Yes.

That's yes, we're Just the and inclusive of engine of segments. across JV. to echo Bob's within engine leasing opening leasing, comments, inclusive seeing what

Operator

is the from McCarthy Brendan with next question line Sidoti. Your of

Brendan Michael McCarthy

volume off Rail at like just looks looked India. the pretty to investment stable. start I It wanted there

quarter. next railcar think you you you talk the of it on next, just maybe a for pace Obviously, about like I Can balance you're the last But seeing? think the end What you're remains the this that the and talk wondering, year, to of at XXXX, start year in and or maybe? the dynamics dynamics about see market XX,XXX, what above utilization mentioned you end at right can good just of at surpass XXX%. to India? but expect looks by you'd like I

Robert Lyons

lot the very for with Indian and development, The dynamics in to and infrastructure you need And think in continued Railway of invest a the India remain support that will just rail rail infrastructure the it's any strong. GDP by its activity continues in steel, whether India, to service. will going about need products construction cement, development related, they're the infrastructure move that growth

cars quarter we demand access doing more we the add build. to And with work is so the the with new that's as to number A mark should in first don't year hit the But capacity that put get certainly have if job at the in what to different what They're our quarter now next And could start want. on go would high. fleet access the deliveries more to so we great builders. X. We really to the governs over XX,XXX We'll or railcars, we good right on this lease. of to were very unfettered where year. a have ability And we wagon they a yes, to at wagons.

Brendan Michael McCarthy

looking $XX million you wagon quarter, the last that just that guidance like up the to segment million. remains the it you same And Obviously, despite profit the additions? still Rail expect gave at looks elevated International $XX

Robert Lyons

that's Yes, correct.

Brendan Michael McCarthy

Wondering question insight if saw provide had on you the you million complaints? provide have Norfolk you Do complaints. Southern they for updates me. And some last that the those can could $XXX settlement. any us with I

Robert Lyons

can of don't that nature, on litigation that. give into you understand a really As little detail we

the has GATX believe position Norfolk made to unfounded will against ourselves strongly and accordingly. continue have Southern very in are We claims we the that defend

Operator

over Shari I turn further for no are Hellerman the back to call there time, this questions. At remarks. closing will

Shari Hellerman

everyone participation call questions. for on the you. me to morning. with I'd follow-up this like their any contact Thank thank Please

Operator

the you Conference Corporation First GATX Call. joining. includes for This Earnings Quarter XXXX Thank

disconnect. now may You

GATX (GATX) 23 Apr 242024 Q1 Earnings call transcript