GATX First Quarter Profit Drops Despite Nearly Full Deployment Of Its Railcars

GATX's GATX first quarter profit fell 46 percent to $41.5 million, or $1.12 per diluted share, from $76.3 million, or $1.98 per diluted share, in the first quarter of 2018.

Chicago-based GATX is a railcar lessor, providing railcars and boxcars to freight railroads and shippers.

Lower remarketing for its North American rail segment contributed to the drop in first quarter net income. Remarketing income was $9 million in the first quarter of 2019 compared with $50 million for the same quarter a year ago.

Despite a lower first quarter profit, GATX's rail assets were nearly fully deployed. North American fleet utilization was 99.4 percent, unchanged from 99.4 percent in the fourth quarter of 2018 but higher than the rate of 98.2 percent in the first quarter of last year. Utilization of GATX's boxcar fleet was 95.2 percent in the first quarter of 2019, compared with 94.2 percent in the fourth quarter of 2018 and 93.5 percent in the first quarter of 2018.

At the end of March, GATX's North American segment owned about 121,000 railcars, including 16,000 boxcars.

Meanwhile, GATX's international segment had a fleet utilization rate of 98.9 percent for GATX Rail Europe in the first quarter of this year, compared with 98.8 percent in the fourth quarter of 2018 and 96.7 percent in the first quarter of 2018. GATX Rail Europe has about 23,105 active railcars.

GATX also has affiliations with Rolls-Royce and Partners Finance, and the company said that affiliation is experiencing "robust" demand for aircraft spare engines. Meanwhile, another GATX segment, the American Steamship Company, has 11 vessels scheduled to operate in 2019.

First quarter revenue totaled $317 million, up 3.8 percent from $305.3 million in the first quarter of last year. Operating expenses were up 1.4 percent to $241 million.

Image sourced from Pixabay

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