Tal International beats by $0.10, misses on revs (29.60 +0.14)
Reports Q3 (Sep) earnings of $1.01 per share, $0.10 better than the Capital IQ Consensus Estimate of $0.91; revenues rose 41.1% year/year to $120.9 mln vs the $127 mln consensus. The co also reported “In general, we expect our operating and financial performance to remain strong for the rest of the year. We expect our leasing revenues to grow moderately from the third quarter to the fourth quarter despite the end of the peak season for dry containers as we will benefit from a full period of revenue from containers placed on hire in the third quarter. However, we expect disposal gains to decrease as used container sale prices begin to return to historical levels. Overall, we expect our Adjusted pre-tax income in the fourth quarter of 2011 to be flat or down slightly from the third quarter level.” Looking forward into 2012, we currently expect the market conditions supporting our strong performance – solid trade growth, a favorable supply / demand balance for containers and limited direct container purchases by our customers – to continue into next year. Based on this, we expect our utilization to remain historically high in 2012 and expect to continue to have attractive opportunities to invest in our fleet and grow our business. Leasing revenues for 2012 should be well above the 2011 (Current consensus rev growth for FY12 is 35.1%) level due to the strong growth achieved over the course of this year and likely opportunities for investments next year. However, we expect used container sale prices to continue to moderate and we expect that our disposal gains will decrease from the very high levels reached in 2011 and be more in line with our historical experience next year.” The main risks we see to our positive expectations for 2012 include a renewed severe global recession and the potential for a major customer default. We don’t currently consider either of these events likely, but we are wary of a variety of potential risks for 2012 due to the current increased level of uncertainty in the global economy and the renewed financial pressures facing our customers.”
