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G&W attributes Q4 operating income growth to North American operations
Genesee & Wyoming Inc. announced this week its fourth-quarter 2018 operating revenue rose 0.7 percent to $575.6 million from $571.6 million in Q4 2017.
Operating income for the quarter slipped 0.8 percent to $105.7 million, while adjusted operating income climbed 5.6 percent to $109.9 million.
Reported diluted earnings per share (EPS) fell to 94 cents with 58.9 million weighted average shares outstanding compared with reported diluted EPS of $6.81 with 62.7 million weighted average shares outstanding in Q4 2017.
A number of factors affect the year-over-year comparison, the most significant of which was the impact of the U.S. Tax Cuts and Jobs Act enacted in December 2017, company officials said in a press release.
The short-line holding company's adjusted diluted EPS jumped nearly 30 percent to $1, led by a 17 percent increase in North American operating income, said Chairman and Chief Executive Officer Jack Hellmann.
Hellmann attributed the North American operating income growth to a 5.8 percent increase in carloads and a 250 basis-point improvement in the operating ratio. The North American operations generated Q4 operating income of $87.2 million versus $74.7 million in Q4 2017, and adjusted operating income totaled $89.3 million versus $75.6 million in the year-ago period.
The North American operations' operating ratio clocked in at 73.6 percent versus 76.4 percent a year earlier.
"The strong results in North America more than offset weaker performance in our Australian and U.K./European operations," Hellmann said.
Meanwhile, for the full year, G&W reported diluted EPS of $4.03 compared with $8.79 in 2017. Year over year, the adjusted diluted EPS climbed 32.8 percent to $3.85 in 2018.
G&W's North American operations reported revenue rose 6.6 percent to $1.36 billion; reported operating income climbed 12.8 percent to $343.1 million; and adjusted operating income increased 10.7 percent to $346.3 million compared with 2017 figures.
As for 2019, the company expects double-digit growth in the adjusted diluted EPS, Hellmann said.
"With strong cash generation, which significantly exceeded our reported net income, and approximately $455 million of availability under our revolving credit facility, we continue to evaluate potential investments in multiple geographies as well as investments in our own shares,” he said.
Contact Progressive Railroading editorial staff.