GATX reported Q1/18 net income of $76.3 million compared to net income of $57.5 million in Q1/17.

GATX Rail North America reported segment profit of $108.9 million in the quarter, compared to $93.0 million in Q1/17. Higher gains on asset dispositions in Q1/18 were partially offset by lower lease revenue, resulting in higher segment profit in 2018.

At March 31, 2018, Rail North America’s wholly owned fleet comprised approximately 119,000 railcars, including approximately 16,200 boxcars.

Fleet utilization was 98.2% at the end of Q1/18, compared to 98.2% at the end of the prior quarter and 99.1% at the end of Q1/17. During Q1/18, the renewal lease rate change of the GATX Lease Price Index was negative 11.6%. This compares to negative 32.4% in the prior quarter and negative 32.6% in Q1/17. The average lease renewal term for cars included in the LPI during the first quarter was 34 months, compared to 36 months in the prior quarter and 29 months in Q1/17. The first quarter renewal success rate was 76.7%. Rail North America’s investment volume during the first quarter was approximately $137 million.

“The condition of the North American railcar leasing market in the first quarter was consistent with our expectations entering the year,” said Brian A. Kenney, president and CEO of GATX. “Rail industry carload data and operating metrics showed mixed performance relative to 2017, and 2018 improvement in the railcar leasing market remains uncertain due to the oversupply of existing railcars and the large railcar manufacturing backlog. The secondary railcar market was strong as evidenced by our remarketing income of $50.0 million for the quarter, which represents the majority of our expected remarketing activity for 2018.”

GATX Rail International segment profit was $19.0 million in Q1/18 compared to $13.4 million in Q1/17. The improvement in segment profit was primarily driven by more cars on lease and a favorable foreign exchange variance.

“Rail International produced solid operating results, with GATX Rail Europe’s fleet utilization at 96.7%,” Kenney said. “The lease rate environment in Europe has stabilized and demand for new cars remains steady.”

At March 31, 2018, GATX Rail Europe’s fleet consisted of approximately 23,000 cars and utilization was 96.7%, compared to 96.8% at the end of the prior quarter and 95.0% at the end Q1/17.

American Steamship Company reported a segment profit of $0.8 million in the first quarter, compared to a segment loss of $0.2 million in Q1/17. ASC’s operations are limited during the first quarter as vessels are in winter lay-up from mid-January through late-March.

“American Steamship Company’s sailing season began at the end of March, and 10 vessels are currently scheduled to operate in 2018,” Kenney said.

GATX Portfolio Management reported segment profit of $13.9 million in Q1/18, compared to $14.7 million in Q1/17. The operating environment at Rolls-Royce and Partners Finance affiliates is positive with higher affiliate income in Q1/18.

“The Rolls-Royce and Partners Finance affiliates had another excellent quarter as demand for spare aircraft engines continues to be strong,” Kenney said. “The year is progressing as we expected, and therefore at this time our 2018 full-year earnings estimate is unchanged at $4.55 – $4.75 per diluted share.”