Thursday, April 22, 2010

GATX earnings down in "inconsistent" recovery

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GATX Corp. has reported 2010 first-quarter net income of $18.7 million, or 40 cents per diluted share, compared to $27.6 million or $.56 per diluted share in the first quarter of 2009. Per-share earnings topped analysts’ consensus estimate of 33 cents.

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“As we expected entering 2010, our markets have stabilized at relatively low levels,” said Brian A. Kenney, president and CEO of GATX. “While there are some signs of recovery, they are inconsistent, and we expect to experience revenue pressure until there is sustainable improvement inthe global economy.”

GATX said that on March 31 its North American railcar fleet totaled approximately 109,000 cars, and fleet utilization was 96.0% compared to 95.9% at year-end and 96.5% at March 31, 2009.

“The market remains very competitive as all lessors are competing aggressively to keep their fleets utilized,” said Kenney. “This has resulted in continued downward pressure on renewal lease rates when compared to expiring rates, as GATX’s LPI [Lease Price Index] was a negative 15.2% in the first quarter, compared to negative 18.7% in the 2009 fourth quarter and negative 5.5% in the prior-year period. The average lease renewal term for cars in the LPI was 31 months compared to 43 months in the 2009 fourth quarter and 45 months in the prior-year period.”

The European wholly-owned tank car fleet totaled approximately 20,000 cars, and utilization was 94.4% compared to 94.7% at year end and 96.5% on March 31, 2009.