Posts Tagged ‘Genesee & Wyoming’

G&W 3rd Quarter Results Weaker Than Expected

November 1, 2017

Weaker than expected was how Genesee & Wyoming described it third quarter financial results.

The global operator of short-line and regional railroads said its third-quarter operating revenue rose 15 percent to $577 million from $501 million, while operating income increased 21 percent to $111.5 million from $91.85 million during the same period in 2016

However, net income attributable to G&W declined to $50.2 million from $56.8 million a year ago. G&W’s adjusted net income was $50.6 million, compared with $47.9 million in the third-quarter 2016.

G&W had diluted earnings per share of 80 cents compared with 98 cents in the same period a year ago.

In a news release, G&W said it incurred restructuring costs of $2.6 million, primarily in the company’s U.K.-Europe region, as well as corporate development and related costs of $1.7 million, mostly related to the Pentalver Transport acquisition.

In North America, operating revenue rose 2.8 percent to $318.9 million primarily due to revenue from new operations.

Financial results for  the third quarter of 2017 were modestly weaker than expected, said G&W Chairman, President and Chief Executive Officer Jack Hellmann in a statement.

“Overall, we were pleased with the performance of our North American operating team in the third quarter as we successfully navigated through two hurricanes and related precautionary shutdowns of several short lines,” Hellmann said. “In addition, we completed the formation of our CG Railway 50-50 joint venture through which we now provide rail ferry service from Mobile, Alabama, to Coatzacoalcos, Mexico.”

Hellman said that in North America, the company continues to face weather-driven variability in grain and coal shipments, but broader economic activity is solid and G&W expects to benefit from a tightening trucking market.

Additionally, the company said it continues to generate strong free cash flow and evaluate acquisition and investment opportunities.


CP Move Into Ohio a Bid to Compete with CN

October 12, 2017

Canadian Pacific and Genesee & Wyoming announced that they would cooperate in opening an intermodal service lane into the Ohio Valley, using an existing terminal in Jeffersonville, Ohio.

But the two carriers did not say when the service will begin or whether it would be provided with a dedicated train.

Trains magazine reported on Wednesday that a CP spokesman had declined to provide additional details, saying only that more information would be available during next week’s quarterly earnings call. A G&W spokesman did not respond to a request for comment.

The new service is an effort to fill containers that would otherwise return empty.

Usually, containers arrive in North America from Asia filled with consumer goods, but return empty across the Pacific.

There has been a growing demand for farm exports to Asia and those empty containers present new markets for railroads, shippers and steamship lines.

From CP’s perspective, Trains said, it the new intermodal service presents an opportunity to battle back against rival Canadian National.

CP has been losing market share at the Port of Vancouver to CN, which handles about 70 percent of the containers that move by rail to and from that port.

CN had direct rail access of agreements with other railroads to reach into the U.S. interior to such points as Indianapolis and Memphis, Tennessee.

However, CP has the advantage of the shortest route from Vancouver to Chicago.

“This service will put CP into an area that CN can’t reach, so they will be able to offer a differentiated product,” said Larry Gross, an analyst with FTR Transportation Intelligence in an interview with Trains. “I think it makes a lot of sense for CP to be working this way. The region is under-served from the west because of the interchange issues in Chicago.”

The containers will be moved out of Ohio by the Indiana & Ohio, which serves a 90-acre terminal in Jeffersonville owned by Bluegrass Farms.

The containers will then be interchanged in Lima, Ohio, to the Chicago, Fort Wayne & Eastern Railroad, which reaches Chicago via a former Pennsylvania Railroad route.

Most of the traffic on the 281-mile CF&E is chemicals, farm products, fertilizers, paper and steel. The 469-mile I&O primarily handles ethanol, farm products, fertilizers, lumber, paper and steel.

CP and G&W officials noted in a news release earlier this week that the Jeffersonville terminal can be easily accessed from Columbus, Cincinnati, and Dayton.

Gross said the key to making the intermodal lane work will be providing a seamless interchange in Chicago.

“With the volume involved being to and from Asia, it won’t be tremendously service-sensitive but the service will need to be reliable,” he said. “Having the ready source of outbound volume is certainly a plus, so the pacing item will be the ability to attract inbound volume.”

Trains noted that the CP-G&W arrangement is similar to a 2013 deal that CN and the Indiana Rail Road reached to provide international intermodal service from Indianapolis to the British Columbia ports of Vancouver and Prince Rupert, British Columbia.

CP to Begin Ohio Intermodal Service Lane

October 11, 2017

The blue line is the Genesee & Wyoming line to be used by Canadian Pacific’s new intermodal service to Ohio.

Canadian Pacific and Genesee & Wyoming plan to launch an intermodal service that will reach into west central Ohio.

The G&W owned lines will handle the traffic between Chicago and Jeffersonville, Ohio.

In a news release, CP said the new intermodal lane will open the Ohio Valley to its intermodal customers and further extend its reach into North American heartland markets.

CP has reached an agreement with Bluegrass Farms to use its 90-acre intermodal facility in Jeffersonville, Ohio, on the I-71 corridor, to serve the Columbus, Cincinnati and Dayton markets.

The farm consortium will continue to own the facility and will operate it on behalf of CP. The site is served by the G&W-owned Indiana & Ohio.

The Bluegrass terminal will handle intermodal and bulk shipments, and transloading services of bulk agricultural products into containers.

CP said the site also features extensive container and trailer storage and room to expand.

Bluegrass Farms is a soybean producer owned by Japan’s Mitsui & Co. (USA).

CP said the new intermodal service will use its one-off live-lift operation at Portal, North Dakota, and its daily service between Vancouver and Chicago.

The railroad is expanding its Asian sales and marketing presence with key positions in China and Singapore.

G&W Reports Increases in Second Quarter Income

August 3, 2017

Genesee & Wyoming reported this week that its second quarter 2017 operating revenue rose 7.8 percent to $540.4 million, while operating income increased 16.2 percent to $101.3 million when compared with the same quarter in 2016.

In a news release, G&W said that its adjusted operating income in the quarter rose 13.3 percent to $107.4 million compared with $94.7 million in the second quarter of 2016.

G&W’s reported net income for the quarter was $46 million, compared with reported net income of $48.4 million in the same period a year ago.

Excluding the net impact of certain items that affect comparability between the quarters, G&W’s adjusted net income in the second quarter of 2017 was $49.9 million compared with $47.0 million in the second quarter of 2016.

The company posted a second quarter diluted earnings per share of 74 cents, compared with reported diluted EPS of 83 cents in the second quarter of 2016. Adjusted diluted EPS for the quarter was 80 cents per share versus 81 cents a year ago.

G&W Carload Traffic Fell in 2nd Quarter

July 17, 2017

Genesee & Wyoming reported a decrease of 0.1 percent in carload traffic in the second quarter of 2017. However, total traffic was up by 14.6 percent worldwide.

G&W’s same-railroad second quarter traffic was 705,940 carloads, a decline of 976 carloads when compared with the second quarter of 2016.

Total traffic was 810,082 carloads, an increase of 103,166 carloads in the second quarter, which included operations in North America, Australia and Europe.

Across its U.S. operations, G&W saw major losses with metallic ore traffic dropping 30.6 percent. Petroleum products fell by 6.1 percent, metals by 3.3 percent, and pulp and paper by 3.2 percent.

Traffic increases came in waste, 24.9 percent; autos and auto parts, 12.7 percent; and minerals and stone, 9.4 percent.

G&W’s same-railroad traffic in June 2017 was 242,763 carloads, a decline of 1,434 carloads (0.6 percent) compared with June 2016.

In the past year, G&W has acquired two short-line railroad companies, the Providence & Worcester and the Heart of Georgia, the latter having been acquired on May 31, 2017.

BLET Members OK Pact with I&O

June 24, 2017

Members of the Brotherhood of Locomotive Engineers and Trainmen have approved a new contract with the Indiana & Ohio Railway.

The union said more than 80 percent of those voting favored ratifying the five-year pact, which covers wages, work rules, and health and welfare benefits for 50 engineers, conductors and trainees.

BLET said the contract calls for a pay hike of 28.6 percent over the life of the contract, which ends Dec. 31, 2020.

The contract also upgrades vacation leave with members receiving an additional vacation day when reaching five-, 10- and 15-year work anniversaries with the company.

Members will receive 10 paid holidays and five flex days. There is also language pertaining to holiday and jury duty pay, as well as bereavement leave.

In a news release, BLET said I&O members are part of the Genesee & Wyoming’s Midwest Region health and welfare plan. The agreement changes the membership’s 401k plan and provides a voucher for two pairs of boots per year.

The contract also outlines procedures for disciplinary hearings and specifies a grievance and arbitration process.

G&W Names Hellman Board Chairman

May 31, 2017

John Hellman has been appointed chairman of the board of directors of Genesee &Wyoming.

Hellman is currently the company’s president and CEO and will succeed Mortimer Fuller III, who is retiring.

In a news release, G&W said that Hellmann will continue in his current positions.

He has served on the board since 2006 and succeeded Fuller as CEO in 2007. Hellman served as chief financial officer in 2000 and was named president in 2005.

Fuller had served as board chairman since 1977 and is a great-grandson of Edward Fuller, the founder of the Genesee and Wyoming Railroad in 1899.

G&W said that during its annual meeting held on May 24 that stockholders elected as directors Albert Neupaver, Joseph Pyne, Hunter Smith and Hellmann for terms that expire in 2020.

Directors whose terms on the board continued after the annual meeting are Richard Allert, Hans Michael Norkus, Ann Reese, Richard Bott, Oivind Lorentzen III and Mark Scudder.

G&W Net Income Down in First Quarter

May 6, 2017

Genesee & Wyoming said its first quarter 2017 operating revenue rose 7.6 percent to $519.1 million from $482.6 million, while operating income increased nearly 36 percent to $77.5 million compared with results in the first quarter of 2016.

Adjusted operating income rose 8.6 percent to $86.6 million compared with $79.8 million in 2016. However, net income fell to $26.2 million in the quarter from $27 million a year ago.

Excluding the net impact of certain items affecting comparisons between the quarters, G&W’s adjusted net income in the first quarter of 2017 was $32.9 million, compared with $38.6 million in the first quarter of 2016.

G&W posted adjusted diluted earnings per share were 53 cents compared with 67 cents in the year-ago quarter.

“ . . . our first quarter financial results were weaker than expected as North American same railroad carload growth of 3 percent was at the low end of our outlook and our operating ratio was a bit higher than plan, primarily due to track washout and derailment expenses,” said G&W President and Chief Executive Officer Jack Hellman in a statement.

G&W said its 2017 outlook remains unchanged.

“In North America, we continue to see modest carload growth with several customer projects starting up later in the year,” Hellman said. “ . . . we continue to generate strong free cash flow and to evaluate a range of acquisition and investment opportunities across our global footprint of railroads.”

G&W Traffic Up 27% in January

February 16, 2017

The acquisition of the Providence & Worcester Railroad last year has helped Genesee & Wyoming railroads post a 27 percent overall traffic increase in January 2017 when compared with the same month in 2016.

G&WThe P&W acquisition was completed last November. G&W railroads handled more than 138,500 railcars in January 2017, an increase of 11 percent over the 124,400 railcars it handled in 2016.

G&W also reported increased traffic on other railroads due to increased shipments of coal, coke, agricultural products and minerals and stone traffic.

Its best performing commodity in January was coal and coke with its railroads carrying more than 22,400 carloads of coal in January 2017, compared with 18,400 carloads in the same month in 2016.

G&W Chairman Fuller to Retire in May

February 4, 2017

Genesee & Wyoming Chairman Mortimer Fuller III has announced that he will retire after 40 years in the short line railroad industry.

G&WThe retirement will become effective after the company’s annual meeting in May. Fuller will be succeeded by Chief Executive Officer Jack Hellman.

Fuller became the head of G&W in 1977, with the titles of CEO, president and chairman, after purchasing a controlling interest in G&W’s corporate predecessor, the original Genesee and Wyoming Railroad

His grandfather was a founder of the original G&W in 1899. Fuller III has served as G&W CEO for 30 years and chairman for 40 years.

On his watch, Fuller oversaw the transformation of G&W in 1996 into a public company and expansion into the Australian and Canadian rail markets in 1997.

G&W’s acquisitions have continued in those markets and recently expanded to the United Kingdom and Europe.