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Rail News: Short Lines & Regionals
Genesee & Wyoming reports strong 3Q results; Arizona short line turns 10
Today, Genesee & Wyoming Inc. (GWI) reported third-quarter "combined company" adjusted operating revenue of $401.4 million, up 10.7 percent, and volume of 482,823 carloads, up 6.8 percent compared with third-quarter 2012.
To provide comparative context for consolidated revenue and traffic, GWI released combined company comparisons that assume former RailAmerica Inc. railroads were owned by GWI during 2012.
Also in 3Q, the short-line holding company's adjusted diluted earnings per share jumped 48.6 percent to $1.19, adjusted net income more than doubled to $68.4 million, income from operations nearly doubled to $101.7 million and same-railroad freight revenue rose 11 percent to $179 million. Operating expenses increased from $169.9 million in third-quarter 2012 to $299.6 million and GWI's adjusted operating ratio improved 1.2 points to 73.8.
In the third quarter, GWI began hiring and training new crews at several former RailAmerica railroads to support traffic growth, and incurred one-time expenses to upgrade facilities, equipment and track at many of the same railroads to meet the company's safety and operating standards, said GWI President and Chief Executive Officer Jack Hellmann in a press release.
"As a result of these costs, and the finalization of our purchase accounting for RailAmerica, our adjusted operating ratio of 73.8 was around 1.3 percentage points higher than our third quarter target," he said. "Our [Australian] operations continued to perform well with a third quarter operating ratio of 70, in line with expectations."
GWI owns and operates 111 regionals and short lines in the United States, Australia, Canada, Netherlands and Belgium, including 108 in North America.
Meanwhile, the San Pedro & Southwestern Railroad (SPSR) will mark its 10th anniversary on Sunday.
Based in Benson, Ariz., where it connects with Union Pacific Railroad's Los Angeles-Chicago mainline, SPSR began operations in 2003 after acquiring the line from RailAmerica.
The short line's oldest predecessor dates back 125 years to 1888, when the Arizona and South Eastern Railroad laid 60 miles of track from Benson to Bisbee, Ariz. The Arizona and South Eastern eventually became part of the Southern Pacific Railroad.
"We're proud to have played an integral role developing southeastern Arizona's economy and being a good neighbor to the towns and cities we serve," said Paul Thomas, vice president of operations for SPSR's parent firm ARG Transportation Services, in a press release.
SPSR's primary traffic sources are agricultural chemicals, feed grains and building products interchanged with the UP at Benson, Willcox and Casa Grande, Ariz. ARG Transportation Services also operates the 133-mile Coos Bay Rail Link in Oregon.
Contact Progressive Railroading editorial staff.