The short-line and regional railroad operator is actively evaluating acquisition and investment opportunities after drastically increasing its net income and revenue.
Genesee & Wyoming Inc. (G&W) reported a net income of $76 million for the first quarter of 2018, up from $27.3 million for last year’s first quarter, the short-line and regional railroad operator announced Tuesday.
G&W’s results for the first quarter of this year included a $31.6 million income tax benefit associated with the U.S. Short Line Tax Credit for fiscal year 2017, which was enacted in February of this year.
Operating revenues of $574.7 million not only rose 10.7 percent from the first quarter of last year but also were slightly higher than the Thompson Reuters estimate of $572.6 million.
Based in Darien, Conn., G&W owns or leases 122 freight railroads across North America, Australia and the Europe/U.K. region.
Despite strong first-quarter results, G&W did encounter challenges in North America from lower utility coal shipments in the Midwest and congestion at several connecting Class I railroads, according to Jack Hellmann, chairman, president and CEO of G&W.
However, congestion and service issues with Class I railways may be easing. STB Vice Chairman Deb Miller said during an April hearing on the implementation of the Surface Transportation Board Reauthorization Act of 2015 that the board had asked certain Class I railways to participate in weekly calls with its customer assistance office to monitor their progress.
Regardless, G&W’s North American Operations segment’s operating income rose 8.1 percent year-over-year to $73.2 million, while its operating revenues inched up 1.9 percent to $325.6 million.
“Our North American business strengthened in March and we see a favorable outlook for rates and volume for the remainder of 2018, despite ongoing pockets of rail system congestion,” Hellmann said.
During the quarter, G&W repurchased 792,921 shares of Class A Common Stock for $57.4 million.
Looking ahead, Hellmann said, “We are actively evaluating acquisition and investment opportunities in all geographies in which we operate. We expect to continue to pursue both traditional M&A opportunities as well as opportunistic share repurchases in 2018.”
G&W holds strong in Q1
