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Rail News: Rail Industry Trends

Genesee & Wyoming: Revenue and income up, operating ratio down


In the fourth quarter, Genesee & Wyoming Inc. (GWI) earned net income of $25.3 million, up 82 percent compared with fourth-quarter 2007’s total. Income from continuing operations soared from $14.5 million to $25.3 million and operating income jumped 35.2 percent to $30.4 million.

Revenue totaled $149.2 million, up 10.9 percent year over year as revenue from acquisitions offset an $11.7 million decrease in same-railroad revenue. Freight revenue rose 15.9 percent to $95.2 million primarily because freight revenue generated by acquired railroads offset a $6.7 million decrease in same-railroad freight revenue.

Quarterly operating expenses totaled $118.8 million, up 6 percent compared with fourth-quarter 2007 costs. However, GWI’s operating ratio dropped 3.7 points to 79.6. Excluding net gains on asset sales and acquisition-related expenses, the operating ratio improved 2.4 points to 80.9.

“On the positive side, our less economically sensitive commodities such as utility coal, grain, waste and salt performed well, and our five recent acquisitions collectively met our financial expectations,” said GWI Chief Executive Officer John Hellmann in a prepared statement. “On the negative side, the severe deterioration of the industrial economy negatively impacted our results, especially in December.”

Meanwhile, GWI also reported traffic from continuing operations for January. Carloads totaled 72,015 units, up 12.2 percent compared with January 2008’s total.

Railroads that GWI acquired within the past 12 months — including CAGY Industries Inc., the Georgia Southwestern Railroad and Ohio Central Railroad System — handled a combined 13,887 carloads.

However, on a “same-railroad” traffic basis, carloads decreased 9.4 percent year over year. GWI attributes the decline to weak pulp and paper, metals and lumber/forest products traffic.

GWI owns and operates 63 regionals and short lines in the United States, Canada, Australia and the Netherlands, and owns a minority interest in a Bolivian railroad.

Contact Progressive Railroading editorial staff.

More News from 2/11/2009