Darien, Conn.-based short line railroad operator Genesee & Wyoming Inc. reported net income of $48.4 million on $501.4 million in revenues for second quarter 2016, year-over-year decreases of 8.3 percent and 7.5 percent, respectively.
Genesee & Wyoming Inc.’s earnings in the second quarter of 2016 slipped 8.3 percent to $48.4 million compared with the same 2015 period as volumes declined across all regional operating segments, according to the company’s most recent financial statements.
The Darien, Conn.-based short line and regional railroad operator saw diluted earnings per share (EPS) fall to $0.83 per share with 58.1 million weighted average shares outstanding, compared with $0.92 per share in the second quarter of 2015. G&W noted that on an adjusted basis, Q2 diluted EPS stood at $0.93 per share, in line with the previous year.
Operating revenues for the quarter dropped 7.5 percent to $542.2 million compared with second quarter 2015.
G&W’s North America segment, which represents about 80 percent of its annual operating income, generated $79.0 million in operating income in Q2 2016, a 3.1 percent bump from the previous year, despite revenues decreasing 2.1 percent to $304.6 million.
North American Operations traffic slid 6.7 percent to 386,123 carloads in the second quarter of 2016 as shipments of coal and coke, agricultural products, pulp and paper, and minerals and stone all fell from prior year levels.
Operating income in the company’s Australia segment plummeted 38 percent year-over-year to $9.4 million (about 10 percent of overall annual operating income) on revenues that fell 17.3 percent to $55.3 million, primarily due to declining volumes of metallic ores.
Australian volumes fell 15.1 percent to 44,251 carloads in the second quarter thanks primarily to declines in metallic ores and agricultural products, which was partially offset by an increase in minerals and stone traffic.
The company’s U.K./Europe unit (also representing 10 percent of G&W’s annual operating income) reported an operating loss of $1.2 million compared with operating income of $7.7 million in second quarter 2015, primarily due to the restructuring of the company’s U.K. coal business. Revenues in the segment stood at $141.5 million for the quarter, a 13.9 percent decline, primarily due to the consolidation of Continental Europe intermodal routes, a decline in coal shipments and lower minerals and stone shipments.
Volumes in the U.K./Europe segment slipped 1.9 percent to 276,542 carloads in second quarter 2016 due to a decreases coal and coke traffic (primarily in the U.K.) and minerals and stone, which was partially offset by an increase in intermodal traffic.
“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,” G&W President and CEO Jack Hellmann. “Despite a 7 percent 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 percent, 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 percent and our adjusted diluted EPS excluding the Short Line Tax Credit declined 13 percent compared to last year,” he added. “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.”
G&W earnings, revenues drop in Q2 2016
