Wednesday, September 19, 2012

CAI container leasing stock on the rise

CAI International, a freight container leasing company based in San Francisco, reported double-digit increases in revenue and earnings growth for the second quarter of 2012. CAI capitalized on stronger container demand and growth in global trade.

The company has returned 25 percent on equity since January, and its stock is on the rise, increasing by 23 percent since June. Its long-term growth projection is 11 percent.

CAI leases and manages freight containers internationally, including reefers, palletwides, roll trailers, swap bodies and rail cars. It's customer base shipping lines, freight forwarders and other transportation companies with both short and long-term agreements.

CAI International reported second quarter 2012 adjusted earnings per share of 67 cents, up 21.8 percent year on year. Revenues grew 38.1 percent year on year to a record $39.7 million, driven by rental revenue and lease income growth.

Investments in the container fleet have resulted in increased benefits for the company. Strong trade growth, increased freight rates, higher demand and higher utilization have been key factors. Average fleet use increase marginally to 94.3 percent in the second quarter. As of the end of June, CAI International's own fleet accounted for 56 percent, while 44 percent were containers managed by the company but owned by third parties.

CAI expects to get a boost from "strong container demand, improving utilization and growth in the Intra Asian and Latin American trades." The firm also buys railcars at discounts that gives it a competitive edge.

The outlook for the company's growth potential is high, rising over the past two month. The Zacks Consensus Estimate for 2012 is up 6.7 percent to $3.19, while the Zacks Consensus Estimate for 2013 increased 10.1 percent to $3.71.

For more of the Forbes story: forbes.com

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