GATX: ‘Strong Demand’ for Railcars, Raises FY Expectations
Published July 20, 2012
Categories: Recent Earnings
GATX reported YTD through June 2012 rail segment profit of $108.2 million, compared to $108.3 million in the second quarter of 2011. The company said the 2012 and 2011 year-to-date results include the pre-tax impact from other items of negative $18.8 million and positive $14.1 million, respectively. Excluding the impact from other items, segment profit improved compared to prior year periods primarily due to higher lease rates in North America, increased asset remarketing activity and lower maintenance expense due to the high renewal success rate.
Brian A. Kenney, president and chief executive officer of GATX, said, “We are seeing continued strong demand for most railcar types in our fleet. During the second quarter, GATX’s Lease Price Index (“LPI”) was a positive 23.9% and the average renewal term for cars in the LPI was 59 months. These results were achieved while maintaining over 98% utilization of the North American railcar fleet.”
“There is also healthy demand for new railcars delivering under our five-year supply agreement. Railcars scheduled to deliver through the end of 2013 have already been allocated to customers on long-term leases at very attractive rates.”
Kenney concluded by saying, “Based on year-to-date performance and continued strength in rail, we are increasing our 2012 full-year earnings expectations to a range $2.65-$2.75 per diluted share.”
To read the full GATX earnings news release click here.