G&W Net Income at $46 Million for Second Quarter

Genesee & Wyoming (G&W) has reported its financial results for the second quarter of 2017, with net income of $46 million compared to $48.4 million in the second quarter of 2016. Diluted earnings per share (EPS) for the 2017 second quarter were $0.74, compared with last year’s second quarter diluted EPS of $0.83.

Excluding the net impact of certain items affecting comparability between periods, adjusted net income was reported at $49.9 million, compared with $47 million in the 2016 second quarter. Adjusted diluted EPS in the 2017 second quarter was $0.80, compared with last year’s adjusted diluted EPS of $0.81.

“In the second quarter of 2017, we closed on the acquisitions of the Heart of Georgia Railroad in the United States and Pentalver in the United Kingdom, we completed the restructuring of ERS in Continental Europe, and we reported financial results that were modestly stronger than expected, with reported diluted EPS of $0.74 and adjusted diluted EPS of $0.80,” said Jack Hellmann, G&W president and CEO. “In the second quarter of 2017, we closed on the acquisitions of the Heart of Georgia Railroad in the United States and Pentalver in the United Kingdom, we completed the restructuring of ERS in Continental Europe, and we reported financial results that were modestly stronger than expected, with reported diluted EPS of $0.74 and adjusted diluted EPS of $0.80”

“In North America, same railroad revenues remained flat overall while we maintained an operating ratio of approximately 75 percent,” added Hellman. “In Australia, our 51 percent-owned business performed well in the second full quarter since the acquisition of Glencore Rail, with higher same railroad shipments of iron ore and manganese and an operating ratio of approximately 74 percent. In the U.K./Europe, the turn-around in our financial performance became increasingly visible, a trend that we expect to continue through 2017 and beyond.”

“Meanwhile, our year-to-date free cash flow was strong and we continue to evaluate a range of acquisition and investment opportunities across our global footprint of railroads,” concluded Hellman.

The company’s total operating revenues increased 7.8 percent to $540.4 million compared to $501.4 million in the second quarter of 2016. Operating income was $101.3 million for the quarter, compared to last year’s second quarter operating income of $87.2 million.

The company’s North American Operations saw second quarter operating revenues increase 3.6 percent to $315.7 million compared with $304.6 million for the 2016 second quarter, primarily due to $8.7 million from new operations as well as increases in agricultural products and minerals and stone revenues. Reported income from operations for the 2017 second quarter increased 0.7 percent to $79.6 million.

Traffic for North American Operations increased 10,924 carloads, or 2.8 percent, to 397,047 carloads in the second quarter of 2017. Same railroad traffic, which excludes 11,483 carloads from new operations, decreased 559 carloads, or 0.1 percent. The decrease was mostly due to decreases of 1,873 carloads of metallic ores traffic (primarily in the Mountain West and Coastal regions), 1,839 carloads of petroleum products traffic (primarily in the Northeast and Mountain West regions), 1,695 carloads of metals traffic (primarily in the Southern and Coastal regions), 1,547 carloads of chemicals and plastics traffic (primarily in the Mountain West Region) and 1,514 carloads of pulp and paper traffic (primarily in the Southern and Coastal regions), partially offset by increases of 3,235 carloads of agricultural products traffic (primarily in the Central and Mountain West regions), 2,422 carloads of waste traffic (primarily in the Northeast and Pacific regions) and 1,380 carloads of minerals and stone traffic (primarily in the Central Region). All remaining traffic increased by a net 872 carloads.