Printer Friendly

GATX ANNOUNCES THIRD QUARTER AND NINE MONTHS EARNINGS; TAX RATE CHANGE RESULTS IN $.42 PER SHARE CHARGE

 CHICAGO, Oct. 26 /PRNewswire/ -- GATX Corp. (NYSE: GMT) today announced third quarter net income of $11.7 million or $.42 per common share. As a result of the new federal tax rate, net income includes a charge of $7.4 million for the cumulative increase in deferred income taxes and an on-going one percent increase to the current tax rate which retroactively affects all of 1993. The total effect of the tax rate change is $8.4 million or $.42 per common share.
 Before the effect of the tax rate adjustment, earnings for the quarter ended Sept. 30, 1993 were $20.1 million or $.84 per common share. For the third quarter of 1992, GATX reported a net loss of $15.4 million or $.96 per common share reflecting a $37 million after-tax special provision to the loss reserve at GATX Capital.
 Before the effect of the tax rate adjustment, earnings for the nine months ended Sept. 30, 1993, were $64.9 million or $2.76 per common share. This compares to a net loss of $28.9 million or $2.00 per common share for 1992 first nine months. The loss in 1992 reflected the $37 million after-tax provision and the adoption of new accounting pronouncements, FASB 106 and FASB 109, in the 1992 first quarter which resulted in a net charge of $46 million. Including the effects of the tax adjustment, net income for the nine months ended Sept. 30, 1993 was $56.5 million or $2.34 per common share. For the first nine months of 1993, cash flow from operations and portfolio proceeds were $350 million compared to $265 million a year ago.
 Presentation Emphasizes Growth Strategies
 During the quarter, the company hosted a major shareholder and analyst meeting in New York City at which the senior management and subsidiary presidents made presentations.
 James J. Glasser, chairman of the board, president and chief executive for GATX, stated, "The significant issues addressed included strategies for growth in revenues and earnings by providing GATX's customer base with value-adding services. These strategies primarily reflect the objectives of industry leadership in computer-based information, environmental expertise, customer service, and asset and financing expertise.
 "The subsidiary presidents of General American Transportation, GATX Terminals and American Steamship specifically addressed market and service opportunities which will drive growth well into the next decade.
 "The president of GATX Capital discussed the strategy of continuing to develop joint ventures and partnerships through which Capital will invest in or manage assets. In Capital's presentation and in response to questions, the company addressed the continuing recession in the domestic airline industry which, in turn, has depressed aircraft leasing markets. Specifically, the company expressed concern about values of DC-10's and Boeing 747 aircraft because of American and United Airlines recent announcements that they will retire some DC-10's from their fleets and the slowing growth rate in demand for Boeing 747 aircraft in freighter service. The company went on to state that despite these issues, substantial opportunities exist in the leasing and asset financing industry, particularly in the niches targeted by GATX Capital where asset and transaction expertise add value.
 "The president of GATX Logistics gave an overview of the growing $300 billion logistics industry. He reviewed the strategies for building revenues and margins, as new services are provided and the trend to outsourcing continues. Areas of particular interest are in the pharmaceutical, hospital supply, durable goods and grocery industries.
 "In answer to questions, the company stated that expectations for 1993 were basically in line with analyst estimates. Despite the continuing strength in its operations, GATX does not see any substantial improvement in the overall economic environment," Glasser said.
 The following subsidiary operating results are shown before the effects of the tax rate adjustment to be comparable to last year's results. A table appears on the final page of this release which presents the effect of the tax rate adjustment by each subsidiary.
 Railcar Leasing & Management
 General American Transportation Corp. reported earnings of $14.0 million for the 1993 third quarter compared to $14.4 million for the comparable period a year ago. The slight downturn reflects lower interest rates on invested funds.
 Fleet utilization was 92 percent at the end of the quarter, comparable to a year ago. The number of cars on lease was 51,500 compared to 49,600 at the end of last year's third quarter.
 Financial Services
 GATX Capital reported earnings of $5.0 million for the third quarter compared to a net loss of $30.4 million a year ago, reflecting the $37 million after-tax special provision to the loss reserve recorded in last year's third quarter. At the end of this year's third quarter the loss reserve was $107 million or 8.1 percent of net investments. During the first nine months of 1993, $24 million has been added to GATX Capital's loss reserve of which an $8.0 million provision was added in the third quarter reflecting continuing concern relating to values of certain aircraft types.
 Disposition gains for the quarter were $6.7 million compared to $8.7 million a year ago. The gains were primarily generated from the sale of rail equipment.
 Terminals and Pipelines
 GATX Terminals Corp. reported earnings of $7.4 million compared to $5.6 million a year ago. The increase in earnings reflects continuing strong demand for tanks and blending services at domestic petroleum terminals as well as improved contributions from certain European and Pacific Rim operations. Utilization at the end of the third quarter was 92 percent compared to 90 percent at this time last year. Throughput for the nine months was 461 million barrels compared to 478 million barrels a year ago.
 Great Lakes Shipping
 American Steamship Company, GATX's Great Lakes shipping operation, earned $2.1 million for the 1993 third quarter. Last year's earnings were at the same level. The third quarter was marred by a number of iron ore mine strikes which required accelerated tonnage deliveries prior to the strike deadlines. Most of these labor interruptions are now resolved and normal deliveries have resumed.
 Logistics and Warehousing
 GATX Logistics reported earnings of $.4 million for the third quarter compared to earnings of $.3 million a year ago. Total square footage of warehousing space increased 8 percent over a year ago to 22.3 million square feet reflecting greater demand by customers for space. Space utilization was 91 percent at the end of the third quarter compared to 88 percent a year ago.
 Corporate and Other
 Corporate and other expenses were $8.8 million for the third quarter of 1993 compared to $7.4 million a year ago. The increase is primarily related to legal expenses regarding a shareholder suit which the company believes is without merit and is defending vigorously.
 GATX Corp. is a $3.4 billion service-based asset company which provides long-lived, complementary distribution assets and related value-adding services that it owns or controls. GATX's rail equipment, aircraft, dry and liquid storage terminals, pipelines, ships and warehouses are an integral part of its customers' transportation/distribution/storage logistic network. GATX Corp. (GMT) is listed on the New York, London, and other stock exchanges.
 GATX CORP.
 (In Millions, Except Per Share Data)
 Periods ended Three months Nine months
 Sept. 30 1993 1992 1993 1992
 Gross income $279.9 $272.8 $806.4 $764.0
 Income (loss) before
 cumulative effect of
 accounting changes 11.7 (15.4) 56.5 16.9
 Net income (loss) 11.7 (15.4) 56.5 (28.9)
 Net income (loss) per share 0.42 (0.96) 2.34 (2.00)
 Fully diluted net income
 (loss) per share 0.42(A) (0.96)(A) 2.34(A) (2.00)(A)
 Average number of common shares
 and common share equivalents
 outstanding (in thousands) 19,971 19,443 19,872 19,431
 (A) -- Conversion of preferred stock excluded from computation of fully diluted earnings because of antidultive effects.
 GATX CORP.
 (In millions, except per share data)
 Income/
 (loss)
 Net Tax before Net
 income/ rate tax rate income/
 (loss) changes changes (loss)
 Three months ended Sept. 30 1993 1992
 Railcar leasing & management $ 9.1 $ 4.9 $14.0 $14.4
 Financial services 3.0 2.0 5.0 (30.4)
 Terminals and pipelines 4.8 2.6 7.4 5.6
 Great Lakes Shipping 2.0 0.1 2.1 2.1
 Logistics and warehousing 0.4 --- 0.4 0.3
 Corporate and other (7.6) (1.2) (8.8) (7.4)
 Net income (loss) $11.7 $ 8.4 $20.1 ($15.4)
 Net income (loss) per
 common share $ 0.42 $ 0.42 $ 0.84 ($0.96)
 Income/ Income/(Loss)
 (loss) before cumu-
 Net Tax before lative effect
 income/ rate tax rate of accounting
 (loss) changes changes changes
 Nine months ended Sept. 30 1993 1992
 Railcar leasing & management $34.8 $ 4.9 $39.7 $37.3
 Financial services 19.3 2.0 21.3 (20.3)
 Terminals and pipelines 18.8 2.6 21.4 16.8
 Great Lakes Shipping 5.3 0.1 5.4 4.5
 Logistics and warehousing --- --- --- 0.3
 Corporate and other (21.7) (1.2) (22.9) (21.7)
 Income before cumulative
 effect of accounting
 changes 56.5 8.4 64.9 16.9
 Cumulative effect of
 accounting changes --- --- --- (45.8)
 Net income (loss) $56.5 $8.4 $64.9 ($28.9)
 Net income (loss) per
 common share $ 2.34 $0.42 $ 2.76 ($ 2.00)
 -0- 10/26/93
 /NOTE TO EDITORS: GATX is holding a teleconference at 2:00 p.m. Chicago time. If you are interested in participating, call 800-837-1012/
 /CONTACT: George Lowman of GATX, 312-312-621-6599/
 (GMT)


CO: ST: IN: SU:

TS -- NY051 -- 6888 10/26/93 12:06 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 26, 1993
Words:1616
Previous Article:WILLCOX & GIBBS REPORTS THIRD QUARTER RESULTS
Next Article:BAUER PUBLISHING GROWS DESPITE DIFFICULT MARKET CONDITIONS; LEADING POSITION IN PROGRAM MAGAZINES STRENGTHENED
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters