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Rail News: Financials

Australian transaction drives up Genesee & Wyoming's second-quarter income

The June sale of its joint venture western Australian operations boosted Genesee & Wyoming Inc.’s (GWI) second-quarter income and earnings. Net income totaled $117.7 million and earnings per diluted share reached $2.76 compared with $11.4 million and 27 cents per diluted share in second-quarter 2005.

After GWI and Wesfarmers Ltd. sold certain assets of the Australian Railroad Group (ARG) to Queensland Rail and Babcock & Brown Ltd., GWI recorded a $208.4 million gain. However, transaction-related expenses totaled $4.9 million and GWI recorded an impairment loss on its investment in ARG of $16.2 million.

Also during the quarter, revenue increased 22.5 percent to $113.6 million and operating income rose 2 percent to $16.3 million compared with second-quarter 2005. GWI’s operating ratio of 85.6 worsened 2.9 points because of higher expenses, an operating loss of $1.1 million in Mexico and other factors.

“While multiple events complicate the reporting of our second-quarter results, they reflect the successful closing of the sale of ARG, which resulted in a very large gain for the company and created significant shareholder value,” said GWI Chairman and Chief Executive Officer Mortimer Fuller III in a prepared statement. “In North America … improved pricing more than offset same railroad declines in coal carload volume related to plant maintenance and weather. Additionally, shipments of lumber and forest products declined due to a slower housing market.”

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More News from 8/2/2006