GATX Reports First Quarter Net Income of $57.5 Million

GATX Corporation has reported a net income of $57.5 million, or $1.44 per diluted share, for the 2017 first quarter compared to last year’s first quarter net income of $69.3 million, or $1.66 per diluted share. The 2016 first quarter results included a net gain of approximately $1.5 million, or $0.04 per diluted share, associated with the planned exit of the majority of Portfolio Management’s marine investments.

“For the second consecutive quarter, North American car loadings increased and railroad velocity decreased on a year over year basis,” said GATX President and CEO Brian A. Kenney. “However, continued railcar oversupply, a large railcar manufacturing backlog, and low fleet utilization among certain competitors combined to prevent general lease rate improvement in the first quarter.”

“Consequently, while GATX’s fleet utilization increased to 99.1 percent in the quarter, the renewal lease rate change of GATX’s Lease Price Index decreased by 32.6 percent, with an average renewal term of 29 months,” continued Kenney. “Our renewal success rate was excellent at 72.4 percent. Our commercial team effectively deployed railcars and displaced competitors’ railcars despite the idle capacity in the industry.”

The Rail North America segment of GATX reported a profit of $93.0 million for the 2017 first quarter, compared to $108.7 in last year’s first quarter. Higher gains on asset dispositions in the 2017 first quarter were more than offset by lower lease revenue and higher maintenance expense, resulting in a lower segment profit.

Rail North America’s wholly owned fleet was approximately 121,000 cars as of March 31, 2017, including approximately 17,400 boxcars. Excluding the boxcar fleet, fleet utilization was 99.1 percent at the end of the first quarter, compared to 98.9 percent at the end of the 2016 first quarter.

Rail International’s first quarter segment profit was $13.4 million, compared to $12.6 million in the 2016 first quarter.

“The year is progressing as we expected, and therefore at this time our 2017 full-year earnings estimate is unchanged at $4.40 - $4.60 per diluted share,” concluded Kenney.