CHICAGO — Rail equipment lessor GATX Corp. on Tuesday reported lower North American profits as expenses grew faster than revenue during the third quarter.
The North American rail segment profit declined 31%, to $70.7 million, as revenue increased 6.4%, to $296.5 million. The company said the decline in the segment’s profit was due to lower gains on asset sales and higher interest and maintenance expenses.
GATX said demand for its 109,000-car North American fleet remains stable. GATX Rail North America’s fleet utilization remained high at 98.9%, excluding its 7,500 boxcars. Renewal lease rates rose as lease terms were extended to an average of 60 months.
“While tariff and macro uncertainties have affected customers who use the most economically sensitive car types, demand for the large majority of car types in our fleet is holding up well,” GATX CEO Robert Lyons said on the company’s earnings call. “An encouraging sign in the North American market is the continued strength of the secondary market. As we offer select packages for sale, we’re seeing very strong demand for GATX Corporation assets from a diverse and deep buyer pool.”
Economic uncertainties are not driving down lease rates, unlike how the market performed in the months leading up to the Great Recession or during the beginning of the Covid-19 pandemic.
“We really don’t see that here. And again, that’s really because the market hasn’t been overbuilt,” says Paul Titterton, president of GATX Rail North America. “And so fleets remain fairly highly utilized. And so again, a little bit of quarter-to-quarter deterioration, but overall across the fleet, for the most part, rates are holding up well.”
GATX expects to close on its joint-venture acquisition of Wells Fargo’s rail leasing business in the first quarter of 2026, if not sooner. GATX and Brookfield Infrastructure Partners in May announced they would acquire Wells Fargo’s 105,000 railcars and its rail finance lease portfolio for $4.4 billion.
GATX’s overall net income — which includes the performance of its North American and international as well as aircraft engine leasing — declined 7.6% for the third quarter, to $82.2 million. Earnings per share declined 7.4%, to $2.25.
