Genesee & Wyoming (GWR) Tops Q2 EPS by 2c, Revenues Beat

Genesee & Wyoming (NYSE: GWR) reported Q2 EPS of $0.94, $0.02 better than the analyst estimate of $0.92. Revenue for the quarter came in at $595 million versus the consensus estimate of $593.19 million.

Second Quarter 2018 Consolidated Highlights Compared with Second Quarter 2017

• Operating revenues increased 10.1% to $595.0 million from $540.4 million.
• Reported operating income increased 3.4% to $103.1 million; Adjusted operating income increased 1.1% to $107.0 million.(1)
• Reported diluted earnings per common share (EPS) decreased 1.4% to $0.73 with 60.9 million weighted average shares outstanding, compared with reported diluted EPS in the second quarter of 2017 of $0.74 with 62.4 million weighted average shares outstanding; Adjusted diluted EPS increased 17.5% to $0.94.(1)
• G&W repurchased approximately 1.9 million shares of its Class A Common Stock for $134.9 million during the second quarter of 2018.

Jack Hellmann, Chairman, President and CEO of G&W, commented, “Our reported financial results for the second quarter of 2018 of $0.73 per diluted share were generally consistent with the second quarter of 2017, primarily because of our previously announced U.K. restructuring charges. Our adjusted diluted EPS of $0.94 for the second quarter of 2018 were at the high end of our outlook as business conditions continued to improve in each of our three geographies, led by North America. Our same railroad carloads increased 8% in North America with particular strength in coal, steel and minerals and stone traffic. 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, our second quarter results were as expected with particular growth in our spot coal traffic due to the early delivery of a new train set. In the UK/Europe, we successfully initiated our restructuring activities and achieved financial results that were ahead of our expectations.”

“Our business outlook for the remainder of 2018 remains promising thanks to growing customer demand for rail shipments across most commodity groups, particularly in North America. 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.”

For earnings history and earnings-related data on Genesee & Wyoming (GWR) click here.

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