G&W: Q3 2017 results 'weaker than expected'
Genesee & Wyoming Inc. reported third-quarter financial results that were "modestly weaker than expected," with diluted earnings per share of 80 cents compared with 98 cents in the same period a year ago, company officials announced today. G&W's third-quarter operating revenue rose 15 percent to $577 million from $501 million, while operating income increased 21 percent to $111.5 million from $91.85 million during the same period in 2016, according to a company press release. Net income attributable to G&W declined to $50.2 million from $56.8 million a year ago. G&W's adjusted net income was $50.6 million, compared with $47.9 million in the third-quarter 2016. Third-quarter 2017 results included restructuring costs of $2.6 million, primarily in the company's U.K.-Europe region, as well as corporate development and related costs of $1.7 million mostly related to the Pentalver Transport Ltd. acquisition. In North America, operating revenue rose 2.8 percent to $318.9 million primarily due to revenue from new operations. Financial results for Q3 2017 were modestly weaker than expected, said G&W Chairman, President and Chief Executive Officer Jack Hellmann. "Overall, we were pleased with the performance of our North American operating team in the third quarter as we successfully navigated through two hurricanes and related precautionary shutdowns of several short lines," Hellmann said. "In addition, we completed the formation of our CG Railway 50-50 joint venture through which we now provide rail ferry service from Mobile, Alabama, to Coatzacoalcos, Mexico." A turnaround in financial performance in the United Kingdom and Europe operations "was right on target and conditions continue to improve," he said. In Australia, coal shipments were disrupted by strikes at certain customer mines in the Hunter Valley during the quarter. However, "the structure of our contract mitigated much of the financial impact and we also commenced spot movements of coal for new customers," Hellmann added. The company's outlook remains positive. "In North America, although we continue to face weather-driven variability in our grain and coal shipments, broader economic activity is solid and we expect to benefit from a tightening trucking market," Hellmann said. "In Australia, we are pursuing multiple new projects amidst an improved commodity price environment," Hellmann added. "In the U.K., multiple revenue and efficiency measures have taken effect and we see a good peak season for intermodal shipments in the months ahead." Additionally, the company continues to generate strong free cash flow and evaluate acquisition and investment opportunities, he said.