Genesee & Wyoming Inc. (G&W) today reported first-quarter adjusted earnings per share (EPS) of 78 cents, an 11.4 percent increase over the same period in 2018 despite severe winter weather and flooding in North America.
The severe weather resulted in a 9 cent, or 10 percent reduction, in diluted EPS versus first-quarter guidance, said G&W Chairman and Chief Executive Officer Jack Hellmann in a press release.
"We expect to recover a portion of the winter-affected traffic in the coming months, our outlook for North American rail shipments remains positive and our 2019 annual guidance remains unchanged," he said.
On a year-over-year basis, G&W’s operating revenue fell 2.9 percent to $558.1 million, operating income decreased 8.3 percent to $79.7 million and adjusted operating income climbed 0.5 percent to $87.8 million. In addition, the company’s reported net income and diluted EPS included $5.4 million, or 10 cents per share, of restructuring and related costs.
During the quarter, G&W implemented cost reduction initiatives in each of its three geographic segments, Hellmann said.
"In North America, we consolidated our Central region into our Midwest and Southern regions," he said. "In the U.K./Europe, we continued to make reductions in our overhead cost structure and to invest in technology, and in Australia, we streamlined rail operations concurrent with the termination of grain operations on the Eyre Peninsula narrow gauge network.”
Additionally, the company evaluated several potential acquisitions and investments during the quarter, Hellmann said. In March, G&W signed two long-term leases of short lines in Indiana that created a 400-mile, four railroad footprint in the Midwest, spanning from eastern Indiana to western Illinois and including interchanges with six Class Is.