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Rail News: Financials

Strong second-quarter results reflect 'increasingly positive' market conditions, GATX says


Add GATX Corp. to the list of companies that had an excellent second quarter in part to its rail-industry subsidiary.

GATX Corp. posted net income from continuing operations of $34.5 million, a 75.1 percent increase compared with second-quarter 2004. Of that total, GATX Rail contributed net income of $23.1 million, a 23.5 percent increase compared with the same 2004 period.

“As highlighted by our strong second-quarter results, market conditions are increasingly positive,” said GATX Corp. President and Chief Executive Officer Brian Kenney in a prepared statement. “In particular, strength in rail-car demand is exceeding our original expectations.”

As of June 30, GATX Rail’s North American fleet totaled 107,000 cars and utilization was at 98 percent -- about the same as it was at year-end 2004 as well as at first quarter’s end. Meanwhile, lease renewal rates continued to increase -- about 15 percent over expiring lease rates. During the quarter, GATX acquired 1,206 cars and sold or scrapped 1,359 others.

“In rail, new-car prices have increased sharply,” Kenney said. “While this provides us with advantaged new car costs under our Committed Purchase Program, economics on car purchases in the spot market are less appealing at this time. [So] we will remain disciplined in our investment approach.”

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More News from 7/29/2005