G&W posts operating revenue, income growth in Q2
(Source: Progressive Railroading 07/30/2018)
Genesee & Wyoming Inc. (G&W) reported second-quarter 2018 operating revenue rose 10 percent to $595 million from $540.4 million and operating income increased 3.4 percent to $103.1 million compared with the same quarter a year ago.
The company’s reported diluted earnings per share (EPS) fell 1.4 percent to 0.73 cents per share for quarter compared with last year’s EPS. Adjusted diluted EPS in Q2 2018 jumped 17.5 percent to 94 cents compared with a year ago, according to a G&W press release.
G&W repurchased 1.9 million shares of its stock for $134.9 million in Q2 2018.
The quarter’s diluted EPS of 73 cents was “generally consistent” with Q2 2017, primarily because of previously announced restructuring charges related to the company’s U.K. operations, said Chairman, President and Chief Executive Officer Jack Hellmann. The adjusted diluted EPS of 94 cents in the quarter were at the “high end of our outlook as business conditions continued to improve in each of our three geographies led by North America,” Hellmann said.
“Our same railroad carloads increased 8 percent in North America with particular strength in coal, steel and minerals and stone traffic,” he said. “While our operating leverage in North America during the quarter was adversely impacted by several variables including the mix of business, the lag in fuel surcharge recovery, and legal fees associated with an arbitration proceeding, we expect to see our customarily strong operating leverage for the remainder of 2018 based on our current volume outlook.”
In Australia, G&W’s second-quarter results came in as expected, “with particular growth in our spot coal traffic due to the early delivery of a new trainset,” said Hellmann. In the United Kingdom and Europe, G&W began its restructuring plan during the quarter and achieved results that were “ahead of our expectations,” he added.
The company anticipates growth in customer demand for rail shipments across most commodity groups — particularly in North America — to continue for the rest of the year, according to Hellmann.
“In addition, we have refinanced our senior credit facility with improved terms through 2023, we have more than $600 million of capacity under our revolving credit facility, and we continue to evaluate investment opportunities in multiple markets including the opportunistic purchase of our own shares,” he said.