GATX: Leasing market “challenging”

GATX reported mixed results for the second quarter Thursday with the following comment by Brian A. Kenney, president and chief executive officer:

"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. This is demonstrated by an 18.6% decrease in our Lease Price Index (LPI) during thequarter, which is consistent with our outlook entering the year. Industry participants continue to price aggressively in order to put the large number of idle cars back into service."

GATX reported corporate 2010 second-quarter net income of $21.5 million, or $.46 per diluted share, compared to 2009 second quarter net income of $12.7 million, or $.27 per diluted share. The company said 2010 second-quarter results include a net benefit of $3.3 million or $.07 per diluted share related to the favorable resolution of a litigation matter and a tax accrual reversal, partially offset by negative fair-value adjustments on interest rate swaps at GATX’s European rail affiliate, AAE Cargo (AAE). The 2009 second-quarter results include negative fair-value adjustments of $6.7 million, or $.14 per diluted share, related to the AAE interest rate swaps.

Net income for the first six months of 2010 was $40.2 million, or $.86 per diluted share, compared to $40.3 million, or $.83 per diluted share, in the prior-year period.