GATX (NYSE:GATX) reported higher fourth-quarter and full-year 2025 earnings, and management laid out 2026 guidance that reflects the closing of its Wells Fargo Rail acquisition and the resulting step-change in fleet scale.
Fourth-quarter and full-year 2025 results
Head of Investor Relations Shari Hellerman said the company posted fourth-quarter 2025 net income of $97 million, or $2.66 per diluted share, compared with $76.5 million, or $2.10 per diluted share, in the fourth quarter of 2024. Results for both periods included net positive impacts from tax adjustments and other items, totaling $0.22 per diluted share in 2025 and $0.17 per diluted share in 2024.
Management highlights from 2025
CEO Bob Lyons said the company entered 2025 expecting earnings-per-share growth “in the 8% range” over 2024, but ultimately delivered an 11% increase. Lyons also pointed to another year of return on equity above 12% and said leverage remained steady at 3.3-to-1, which he described as a conservative balance-sheet structure.
Lyons said the company deployed $1.3 billion of capital during 2025. Within Rail North America, he said utilization held at 99%, and the company closed more than $640 million of new investments. Lyons also cited continued investment in the company’s maintenance network and said the secondary market was “very robust,” which supported portfolio optimization and “substantial” remarketing income.
In Rail International, Lyons said the European economic environment did not improve as hoped, but GATX Rail Europe raised lease rates on many car types and maintained “solid” utilization. He also highlighted a large transaction in Europe: the acquisition of nearly 6,000 rail cars from DB Cargo. In India, Lyons said the economic backdrop was strong and that the portfolio grew to over 12,000 wagons.
Lyons said demand for spare aircraft engines was “very robust” in 2025, with growth in both assets and earnings across the joint venture and wholly owned engine leasing operations. He added that engine leasing produced the strongest earnings growth among GATX’s businesses in 2025, supported by lease rate increases and engine sale opportunities.
Wells Fargo Rail transaction and integration update
Lyons reviewed the structure of the Wells Fargo Rail transaction, describing three key elements:
- GATX and Brookfield formed a new joint venture that acquired 101,000 rail cars that were Wells Fargo Rail’s operating lease assets. GATX owns 30% and Brookfield owns 70%, with GATX holding an option to buy down Brookfield’s interest over time.
- Brookfield acquired approximately 22,000 rail cars directly from Wells Fargo that were under finance leases.
- GATX will manage all rail cars involved in both transactions.
Lyons said GATX will consolidate 100% of the new JV into its financial statements under U.S. GAAP because GATX is the controlling partner, with Brookfield’s share reflected as “net income attributable to non-controlling interest.” Operationally, he said GATX intends to manage the combined portfolios as “one fleet” totaling 208,000 rail cars (GATX’s legacy 107,000 plus the acquired 101,000).
On integration, Lyons said the deal closed on January 1 and included an IT cutover involving “hundreds of thousands of data points,” which he said went well. He also said commercial integration progressed quickly given that many large accounts were already GATX customers.
On maintenance, Lyons said Wells Fargo historically spent about $135 million annually on maintenance and used third-party shops because, as a bank, it was not allowed to own shops. Lyons said GATX’s shops are currently at full capacity, so the company will continue using third-party shops for the acquired fleet in the near term, with potential to move some work in-house over time as GATX invests in shop capacity and efficiency. Lyons added that within seven weeks of ownership, GATX had already reduced the number of third-party shops used for the acquired fleet from “close to 80” and expects further consolidation as work shifts to preferred providers.
2026 outlook: bigger fleet, higher revenue, and expected EPS growth
Lyons said GATX expects a similar North American operating environment to 2025. For the consolidated Rail North America fleet, management guided to:
- Lease Price Index (LPI): high teens to low 20% positive, following 21.9% in Q4
- Utilization: 98%–99% by year-end (Wells Fargo fleet was ~97% utilized at closing)
- Renewal success rate: high 70% to low 80% range
Lyons provided expectations for key 2026 line items, noting most year-over-year changes reflect the addition of the Wells Fargo fleet. He guided Rail North America lease revenue to about $1.6 billion (roughly $550 million higher than 2025), and “other revenue” largely tied to repair revenue to about $160 million (up $25 million year over year). He also projected approximately $200 million of net gains on asset dispositions, compared with $130 million in 2025, citing a robust secondary market and a larger pool of potential sale candidates.
On costs, Lyons forecast 2026 interest expense of about $440 million (up $180 million), depreciation of about $520 million (up $230 million), maintenance expense of about $500 million (up $150 million), and other operating expenses of about $85 million (up $25 million). He said these increases are largely driven by the expanded fleet. Segment profit for Rail North America was guided to $415 million, up $55 million–$65 million from 2025.
For Rail International, Lyons said Europe is expected to remain challenging but that the business should still deliver profit growth; he said India also is expected to grow with a “very strong” economic tailwind. Combined, GATX expects Rail International segment profit to increase by $5 million–$10 million.
In Engine Leasing, Lyons said market conditions remain favorable due to strong global air travel and extended lead times for new engines and repairs. Management guided Engine Leasing segment profit to increase by $15 million–$20 million in 2026. CFO Tom Ellman later told analysts that engine leasing segment profit was expected to be in the $180 million range in 2026, up from roughly $165 million in 2025. Ellman also said that in 2025, about two-thirds of the year-over-year engine leasing segment profit increase was operating income and about one-third was remarketing gains, and he said a similar mix was a reasonable assumption for 2026, while emphasizing remarketing can be “lumpy.”
On expenses, Lyons guided SG&A to $275 million in 2026, up from $246 million in 2025, attributing most of the increase to staffing added for the acquisition. He emphasized that the company more than doubled the size of its owned and managed rail fleet while increasing SG&A by “just over 10%,” including inflationary pressures.
Overall, Lyons guided 2026 earnings to $9.50–$10.10 per diluted share, which he said would represent another record year and roughly 10% growth while integrating the company’s largest acquisition. He also discussed how operating lease accounting can be dilutive in the early years of ownership, and said GATX expects to offset that through platform scalability, management services, and what he characterized as an attractive acquisition valuation.
During Q&A, Ellman said variability in results can come from gains on asset sales in both Rail North America and Engine Leasing, and from the size of the maintenance spend, noting that even small percentage changes could be meaningful. He also said guidance assumes no material disruption to the global economy or the aviation market.
Management also addressed how JV-related asset sales flow through earnings. In response to an analyst question on “net income less remarketing,” Ellman said gains on sales from the JV are subject to the non-controlling interest, meaning GATX economically receives 30% of those JV gains.
Capital allocation: dividend hike and new buyback authorization
Lyons said the board approved an 8.2% increase in the quarterly dividend, above the roughly 5% increases in prior years, citing confidence in cash flow and the company’s expanded scale and outlook.
The board also approved a new $300 million share repurchase authorization after the prior authorization (granted in 2019) was exhausted in the fourth quarter. Lyons said repurchases are used periodically within the company’s capital allocation framework, which he summarized as prioritizing investments in assets at attractive valuations, maintaining prudent leverage, and returning excess capital through dividends and buybacks. Ellman said GATX repurchased about $46.5 million of stock in the fourth quarter at an average price of $160 per share.
About GATX (NYSE:GATX)
GATX Corporation (NYSE: GATX) is a global railcar leasing and asset management company headquartered in Chicago, Illinois. Founded in 1898 as General American Transportation Corporation, GATX has grown into one of the world’s leading lessors of railcars, marine vessels and industrial assets. The company’s core business focuses on leasing and managing high-value equipment for customers in the energy, industrial, chemical, agricultural and metals markets.
In its Rail North America segment, GATX owns and manages a diverse fleet of more than 60,000 railcars, including tank cars, covered hoppers, boxcars and flatcars.
