GATX’s Profit Soared in Second Quarter

GATX’s Profit Soared in Second Quarter

GATX reported its profit in the second quarter of 2013 was $35.1 million, spiking 49.4 percent from $23.5 million in the second quarter of 2012.

The second quarter results received a benefit from tax adjustments and other items of $3.0 million, while the 2012 second quarter results included the negative impact of tax adjustments and other items of $15.3 million.

In the first half of the year, total profit was up, reaching $62.2 million, compared with $53.8 million in the first six months of last year. Year-to-date results included the benefit from tax adjustments and other items of $1.7 million, while the 2012 year-to-date results included the negative impact from tax adjustments and other items of $17.5 million.

The railcar leasing company’s North American segment profit was $48.2 million in the second quarter, declining year-over-year from $53.2 million. Year-to-date, segment profit was $98.5 million, versus $103.9 million in the first half of 2012. The declines were primarily driven by an expected increase in maintenance expense, according to GATX.

The Rail International segment had a profit of $24.4 million in the second quarter, compared with a loss of $3.6 million in the second quarter in the previous year. The segment’s profit in the first half of the year was $43.0 million, compared with $4.3 million in 2012. The quarterly and year-to-date increases were driven by higher lease income and lower maintenance expense at GATX Rail Europe, the company said.

American Steamship Co., a subsidiary of GATX that operates a fleet in the Great Lakes, reported quarterly segment profit of $10.1 million, falling from $14.0 million in the second quarter of 2012. Year-to-date profit declined from $16.1 million in 2012 to $10.9 million in 2013. The quarterly and year-to-date declines were fueled by lower freight volume and operating delays. Low water levels also impacted the second quarter, and the commodity mix of freight carried affected the year-to-date results.  

Furthermore, total quarterly revenue was $338.9 million, improving 4.9 percent from $323.1 in the same period last year. Revenue in the first six months of the year was $611.2 million, increasing from $579.6 million.

The company expects income to be strong during the second half of the year, Kenney noted.