G&W Reports 2017 Fourth Quarter Results

Genesee & Wyoming (G&W) has reported its financial results for the fourth quarter of 2017, with net income of $426.6 million, compared with net income of $8.9 million in the fourth quarter of 2016. Net income included an income tax benefit associated with the U.S. Tax Cuts & Jobs Act. Adjusted net income was $48.6 million, compared with $49.3 million in the 2016 fourth quarter.

The company's reported diluted EPS for the fourth quarter was $6.81 compared with diluted EPS in the 2016 fourth quarter of $.15. Excluding the net impact of certain items affecting comparability, G&W’s adjusted diluted EPS was $0.77, compared to an adjusted diluted EPS of $0.84 in the fourth quarter 2016.

For the fourth quarter of 2017, operating revenues were $571.6 million, an increase of $55.0 million, or 10.7 percent, when compared to in the fourth quarter of 2016. Reported income from operations was $108.2 million, compared with $53.6 million for the same quarter in 2016.

“Our reported diluted EPS for the fourth quarter of 2017 were $6.81, of which a significant portion was a $372 million benefit from new tax legislation in the United States,” said G&W President and CEO Jack Hellmann. “Excluding the tax benefit and certain other items, our adjusted diluted EPS were $0.77 in the fourth quarter, as revenues in each of our geographic segments, North America, Australia and the U.K./Europe, finished the year in-line with our expectations.”

“In 2017, we generated adjusted free cash flow attributable to G&W of $250 million, a 3.6 percent increase over 2016, as we effectively managed both expenses and capital expenditures to more than offset flat revenue,” continued Hellmann. “In 2018, with an improving business outlook in each of our operating regions, we expect double digit growth in both adjusted earnings per share and adjusted free cash flow attributable to G&W. At the same time, we continue to evaluate acquisition and investment opportunities across G&W’s global footprint and have approximately $400 million of borrowing capacity under our revolving credit facility.”

In G&W's North American Operations, the company reported a 0.6 percent decrease to $320.2 million in 2017 fourth quarter operating revenues. The decrease was primarily due to an $11.5 million decrease in freight-related revenues, partially offset by an increase of $9.3 million in freight revenues. Income from North American Operations was $74.6 million for the 2017 fourth quarter, a 10.5 percent decrease compared with the fourth quarter of 2016.

In the 2017 fourth quarter, North American Operations traffic dropped 7,517 carloads, or 1.9 percent, to 395,422 carloads. Excluding carloads from new operations, same railroad traffic decreased 12,763 carloads, or 3.2 percent compared with the fourth quarter of 2016. 

For the year ending December 31, 2017, G&W reported net income of $549.1 million, compared with $141.1 million for the year that ended December 31, 2016. Excluding the impact of certain items affecting comparability, G&W’s adjusted net income for the year was $182.0 million, compared with an adjusted net income of $182.4 million for the 2016 year.