John D. Boyd | Jan 21, 2010 6:09PM EST
Freight equipment leasing firm GATX said its net profit fell 25.6 percent to $21.5 million in the fourth quarter as a decline in rail shipping demand pushed pushed the profit in railcar lease operations down 42 percent to $33.9 million.
For all of 2009, GATX said its company-wide net profit of $81.4 million was down 58 percent on gross income of $1.15 billion. Its dominant rail segment fared somewhat better, with profit down 45 percent to $169 million.
GATX’s other operations include Great Lakes ship line American Steamship, which is a much smaller part of the company and which was hurt by the lowest level of iron ore shipments on the lakes in 70 years.
The steamship line and other GATX units are just a fraction of its railcar leasing business, which generated $845 million in 2009 lease income. It has one of the world’s largest railcar fleets with 110,870 North American units in the fourth quarter, down from 112,976 a year earlier.
“Lease rates remained under pressure throughout the year,” said GATX President and CEO Brian A. Kenney, although the company had a fleet utilization rate of 95.9 percent at the end of the year.
And “in anticipation of an eventual market recovery,” GATX shortened the terms of its lease renewals during 2009. Renewals averaged 43 months in the final 2009 period, compared with 65 months a year earlier.
“In this environment,” Kenney said, “GATX remains focused on utilization, cost containment and asset growth.”
Contact John Boyd at jboyd@joc.com.
