Genesee & Wyoming (G&W) has reported its financial results for the second quarter of 2016, with net income of $48.4 million compared to $52.8 million in the second quarter of 2015. Diluted earnings per share (EPS) for the 2016 second quarter were $0.83, compared with last year’s second quarter diluted EPS of $0.92.
Excluding the net impact of certain items affecting comparability between periods, adjusted net income was reported at $54 million, compared with $53 million in the 2015 second quarter. Adjusted diluted EPS in the 2016 second quarter was $0.93, compared with last year’s adjusted diluted EPS of $0.93.
"Our financial results for the second quarter of 2016 were well ahead of our outlook, primarily due to good performance from our North American Operations,” said Jack Hellmann, G&W president and CEO. “Despite a 7 percent decline in North American carloads, favorable revenue mix and effective management of costs led to an improvement in our reported North American operating ratio of 1.3 percentage points to 74.1 percent, and a modest increase in our operating income. Meanwhile, our Australian and U.K./Europe Operations performed generally in-line with our expectations and we successfully completed the restructuring of our U.K. coal business."
The company’s total operating revenues decreased 7.5 percent to $501.4 million compared to $542.2 million in the second quarter of 2015. Operating income was $87.2 million for the quarter, compared with $99.5 million for same time period last year. Adjusted operating income adjusted operating income in the second quarter of 2016 was $94.4 million, compared with $99.8 million in the 2015 second quarter.
The company’s North American Operations saw second quarter operating revenues drop 2.1 percent, or $6.4 million, to $304.6 million compared with $311 million for the 2015 second quarter. Excluding a $1.2 million decrease due to the impact of foreign currency depreciation, revenues decreased $5.2 million, or 1.7 percent, primarily due to declines in coal, grain and pulp and paper shipments. Reported income from operations for the 2016 second quarter increased 3.1 percent to $79 million.
Traffic for North American Operations decreased 27,765 carloads, or 6.7 percent, to 386,123 carloads in the second quarter of 2016. This was due mostly to decreases of 17,208 carloads of coal and coke traffic (primarily in the Midwest and Northeast regions), 4,360 carloads of agricultural products traffic (primarily in the Midwest and Mountain West regions), 4,174 carloads of pulp and paper traffic (primarily in the Midwest, Northeast, Southern, Canada and Pacific regions) and 3,990 carloads of minerals and stone traffic (primarily in the Northeast Region).
“"While we are pleased with our second quarter results, our reported diluted EPS declined 10 percent and our adjusted diluted EPS excluding the Short Line Tax Credit declined 13 percent compared to last year. As a result, we remain focused on improving the efficiency of our operations amidst uneven business environments in each of our three segments worldwide. At the same time, this economic uncertainty continues to provide acquisition and investment opportunities that we are carefully evaluating in multiple geographies within our global footprint," concluded Hellmann.