(Source: Genesee & Wyoming press release, August 1, 2016)
DARIEN, Conn. — Genesee & Wyoming Inc. (G&W) reported second quarter 2016 financial results on August 1, 2016.
Second Quarter Consolidated Highlights
• Operating revenues decreased 7.5% to $501.4 million from $542.2 million.
• Reported operating income decreased 12.3% to $87.2 million; Adjusted operating income decreased 5.3% to $94.4 million.(1)
• Reported diluted earnings per common share (EPS) decreased 9.8% to $0.83; Adjusted diluted EPS remained constant at $0.93; Adjusted diluted EPS excluding the Short Line Tax Credit decreased 12.9% to $0.81.(1)
Second Quarter Segment Highlights
• North America (approximately 80% of G&W’s annual operating income): Operating revenues from G&W’s North American Operations decreased 2.1% to $304.6 million from $311.0 million. Reported operating income from G&W’s North American Operations increased 3.1% to $79.0 million; Adjusted operating income from G&W’s North American Operations increased 4.8% to $80.8 million.(1)
• Australia (approximately 10% of G&W’s annual operating income): Operating revenues from G&W’s Australian Operations decreased 17.3% to $55.3 million from $66.8 million, primarily due to declining metallic ores shipments. Reported operating income from G&W’s Australian Operations decreased 38.0% to $9.4 million; Adjusted operating income from G&W’s Australian Operations decreased 31.6% to $10.2 million.(1)
• U.K./Europe (approximately 10% of G&W’s annual operating income): Operating revenues from G&W’s U.K./European Operations decreased 13.9% to $141.5 million from $164.4 million primarily due to the consolidation of Continental Europe intermodal routes, a decline in coal shipments and lower minerals and stone shipments. Reported operating loss from G&W’s U.K./European Operations was $1.2 million, primarily due to the restructuring of the U.K. coal business; Adjusted operating income from G&W’s U.K./European Operations was $3.4 million.(1)
Jack Hellmann, President and CEO of G&W, commented, “Our financial results for the second quarter of 2016 were well ahead of our outlook, primarily due to good performance from our North American Operations. Despite a 7% decline in North American carloads, favorable revenue mix and effective management of costs led to an improvement in our reported North American operating ratio of 1.3 percentage points to 74.1%, and a modest increase in our operating income. Meanwhile, our Australian and U.K./Europe Operations performed generally in-line with our expectations and we successfully completed the restructuring of our U.K. coal business.”
“While we are pleased with our second quarter results, our reported diluted EPS declined 10% and our adjusted diluted EPS excluding the Short Line Tax Credit declined 13% compared to last year. As a result, we remain focused on improving the efficiency of our operations amidst uneven business environments in each of our three segments worldwide. At the same time, this economic uncertainty continues to provide acquisition and investment opportunities that we are carefully evaluating in multiple geographies within our global footprint.”(1)
Financial Results
G&W’s operating revenues decreased $40.8 million, or 7.5%, to $501.4 million in the second quarter of 2016, compared with $542.2 million in the second quarter of 2015. G&W’s operating income in the second quarter of 2016 was $87.2 million, compared with $99.5 million in the second quarter of 2015. G&W’s adjusted operating income in the second quarter of 2016 was $94.4 million, compared with $99.8 million in the second quarter of 2015.(1)
G&W’s reported net income in the second quarter of 2016 was $48.4 million, compared with reported net income of $52.8 million in the second quarter of 2015. Excluding the net impact of certain items affecting comparability between periods discussed below, G&W’s adjusted net income in the second quarter of 2016 was $54.0 million, compared with $53.0 million in the second quarter of 2015.(1)
G&W’s reported diluted EPS in the second quarter of 2016 were $0.83 with 58.1 million weighted average shares outstanding, compared with reported diluted EPS in the second quarter of 2015 of $0.92 with 57.1 million weighted average shares outstanding. G&W’s adjusted diluted EPS in the second quarter of 2016 were $0.93 with 58.1 million weighted average shares outstanding, compared with adjusted diluted EPS in the second quarter of 2015 of $0.93 with 57.1 million weighted average shares outstanding. G&W’s adjusted diluted EPS excluding the Short Line Tax Credit in the second quarter of 2016 were $0.81 with 58.1 million weighted average shares outstanding, compared with adjusted diluted EPS in the second quarter of 2015 of $0.93 with 57.1 million weighted average shares outstanding.(1)