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Rail News: Financials

Genesee & Wyoming increases third-quarter income, lowers operating ratio


Today Genesee & Wyoming Inc. (GWI) reported third-quarter net income of $10.1 million, a 33.2 percent increase compared with third-quarter 2003.

The company's quarterly North American revenue rose 25.6 percent to $77.2 million, including $9.4 million from "same railroad" growth and $6.3 million from short lines GWI acquired from Georgia-Pacific Corp.
North American operating income increased 43.4 percent to $13.2 million and the company's North American operating ratio improved 2.1 points to 82.9 compared with last year.

However, quarterly operating expenses rose about 22 percent to $64 million primarily because of track washouts and flood damage in the New York- Pennsylvania region caused by remnants of Hurricane Ivan, and higher fuel prices.

"Our U.S. and Canadian regions continue to grow extremely well, as illustrated by the 15.4 percent same railroad growth in the third quarter," said GWI Chairman and Chief Executive Officer Mortimer Fuller III in a prepared statement. "Excellent business conditions not only offset significant increases in the price of diesel fuel but also enabled us to absorb the damage to our infrastructure in Pennsylvania from heavy rains."

In Australia, quarterly revenue from GWI's half-owned subsidiary Australian Railroad Group (ARG) rose 35.6 percent to $83.7 million compared with third-quarter 2003 because of increasing grain, and ores and minerals business. ARG's quarterly operating income increased 49.8 percent to $16.7 million and operating ratio improved 1.9 points to 80 compared with last year.

"[However], ARG's operating margins suffered from the impact of driver shortages and the continuing rise in the cost of diesel fuel," said Fuller. ARG is diligently executing a plan to hire and train new locomotive drivers to mitigate these costs, and is also expecting to recapture a significant portion of the fuel costs under the provisions of many of customer contracts later this year and into 2005."

During 2004's first nine months, GWI earned net income of $30.4 million, a 46.1 percent increase compared with the same 2003 period. North American operations generated free cash flow of $27.8 million compared with $24.7 million last year. In addition, GWI's nine-month operating ratio improved 1.8 points to 82.9.

Contact Progressive Railroading editorial staff.

More News from 11/2/2004