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Behind Genesee & Wyoming’s Rising North American Revenues in 3Q17

Samuel Prince - Author

Nov. 7 2017, Updated 9:02 a.m. ET

North American revenue in 3Q17

Genesee & Wyoming’s (GWR) North American revenues contribute ~55.0% of its overall operating revenues. In 3Q17, North American revenues totaled $318.9 million, compared with the $322.5 million we saw in 3Q16.

However, railroad revenues in the territory were flat on a YoY (year-over-year) basis in 3Q17.

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North American carloads in 3Q17

In 3Q17, GWR’s North American overall volumes from rail operations included the Providence and Worcester and Heart of Georgia railroad acquisition. Total volumes rose 1.4% to 408,000 carloads from 402,000 units in 3Q16, but same railroad carloads fell 1.9%.

The volumes of autos and auto parts, chemicals and plastics (DOW), lumber and forest products, metals, minerals and stone, and pulp and paper all rose in 3Q17. These were unfavorably offset by lower volumes of agricultural products (ADM), coal and coke, food and kindred products, and petroleum products (SLB).

Management outlook

Genesee & Wyoming expects to see $310.0 million–$315.0 million in 4Q17. For fiscal 2017, the company expects its North American operations to contribute $1.26 billion–$1.27 billion in revenues to estimated revenues of $2.2 billion. While GWR foresees a 2% gain in North American volumes, same railroad carloads are expected to fall 1% in 2017.

GWR stock makes up part of the First Trust Industrials/Producer Durables AlphaDEX Fund (FXR). FXR invests 1% of its holdings in GWR, with 21% exposure to major airlines and trucking companies in the US.

Next, we’ll discuss GWR’s UK and European operations in 3Q17.


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