(The following story by John D. Boyd appeared on The Journal of Commerce website on July 23, 2010.)
WASHINGTON, D.C. Rail equipment leasing giant GATX depended partly on a pickup in its shipping operations to post a 69 percent profit jump to $21.5 million in the second quarter, from a year earlier, while earnings at its dominant rail segment slid 34 percent to $29.4 million.
GATX controls one of the worlds largest railcar fleets, with major supply operations in North America and Europe. It also owns American Steamship Co., which operates a Great Lakes bulk shipping fleet.
It took in $218 million in second-quarter revenue on its rail operations, $53 million from ASC and $16 million from specialty business.
While both the marine and specialty units saw sales and profits rise, the rail receipts were down about $10 million from a year earlier and the segments profit was down nearly $15 million. Brian Kenney, GATX president and CEO, said the North American railcar leasing market continues to be challenging. Although GATX's absolute lease rates and fleet utilization increased during the quarter, revenue remains under pressure.
The company has a railcar fleet totaling about 109,000 railcars across the continent, plus hundreds of locomotives. Its car fleet utilization rate rose to 96.5 percent as of June 30, from 96 percent three months earlier.
In Europe, it owns a tank car fleet of 20,000 cars, whose utilization rate of 94.4 percent in the latest count was about the same as in the first quarter.
GATX said its ship service, which enjoyed a $9.1 profit in the second quarter that was up from $4 million a year earlier, benefited from sharp gains in steel mill activity that lifted cargo volume significantly compared with the recession-struck tonnages in 2009.
