John D. Boyd | Jul 29, 2011 10:31AM EDT
Railcar leasing giant GATX raised its outlook for this year on continued signs of strength in the rail freight market in North American and Europe, including higher utilization of its large equipment fleets and stronger pricing.
While GATX also has other business lines including steamship operations, President and CEO Brian Kenney said the upgraded expectations were based on the rail market’s strength
GATX now says it can earn $1.85 - $1.95 per diluted share this year. In April it projected $1.70 to $1.80 a share.
The outlook change is yet another sign of recovery under way in the freight equipment market, despite slow growth in underlying freight volume.
GATX operates a fleet of 109,000 railcars in North America with a broad range of car types. In Europe it owns 27,000 tank cars.
While demand strengthened for its equipment in both regions, Kenney said in its dominant North American rail unit the pickup in lease rate increases signals “broad-based demand across most car types in our fleet.”
Fleet utilization for that region rose to 98.2 percent in the April-June period from 97.8 percent at the end of the first quarter, and 96.5 percent on June 30, 2010.
That and pricing improvement helped lift its overall rail segment to $56.7 million from $29.4 million a year earlier. Overall profit rose 23 percent to $26.4 million, while revenue gained 9.2 percent to $315 million.
-- Contact John D. Boyd at jboyd@joc.com. Follow him on Twitter www.twitter.com/jboydjoc