American Railcar Industries (ARI) reported Q2/18 consolidated revenues were $146.5 million, an increase of 34% when compared to $109.0 million for the same period in 2017. This increase was primarily driven by increased revenues in the manufacturing segment and slight increases in the railcar leasing and railcar services segments. During the second quarter of 2018, ARI shipped 914 railcars for direct sale and 19 railcars for lease compared to 531 railcars for direct sale and 545 railcars for lease during the same period in 2017.

ARI said railcar leasing revenues were $34.8 million for Q2/18, an increase of 3% compared to $33.7 million for the same period of 2017. The primary reason for the increase in revenue was an increase in the number of railcars on lease, partially offset by a decline in weighted average lease rates for new railcars for lease, leased railcars being reassigned to other customers, and lease renewals compared to the same period in 2017. ARI had 13,341 railcars in its lease fleet as of June 30, 2018 compared to 12,414 railcars as of June 30, 2017.

ARI said railcars built for the lease fleet represented 2% of its railcar shipments during Q2/18 compared to 51% for the same period in 2017. Due to the prevalence of lower lease rates in today’s North American railcar market, the company said it continues to maintain a disciplined approach to investing in its lease fleet.

John O’Bryan, president and CEO of ARI, commented, “The North American railcar market has shown signs of recovery, including carload growth driven by a wide array of commodity types and a decline in railcars in storage over the first half of 2018. Our inquiry activity has remained strong during the second quarter of 2018, and the industry reported quarterly orders of over 23,000 railcars, its highest point since the fourth quarter of 2014.

“However, an oversupply remains in the marketplace of most railcar types, including covered hoppers and tanks, which continues to drive a competitive pricing environment. We continue to align our production with market conditions and industry demand to meet customers’ short term and long term needs. We are committed to our vision of aligning people, processes and tools to deliver world class results in safety, quality and service. We remain disciplined in investing in railcars for lease by strategically partnering with our customers. With ARI’s diversified lease fleet of over 13,300 railcars and our railcar services network, we are well-positioned to identify and deliver solutions for the railcar industry.”