GWR’s First-Quarter Earnings Beat Estimates



GWR’s first-quarter earnings

In this final part of the series, we’ll go through GWR’s first-quarter key financial metrics. On May 1, Genesee & Wyoming (GWR) reported its first-quarter results of operations. The company’s reported EPS (earnings per share) of $1.19 in that quarter surpassed analysts’ estimate by 62.4%. However, GWR’s adjusted EPS of $0.70 missed estimates by 4.3% in the first quarter. The railroad’s adjusted earnings went up by a solid 32.1% from $0.53 per share in Q1 2017 YoY (year-over-year).

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First-quarter revenues and other operating stats

Genesee & Wyoming beat analysts’ revenue estimate by 0.4% in the first quarter. The company’s revenues were $574.6 million, up 10.7% YoY from $519.1 million in the first quarter of 2017. GWR’s reported operating profit rose 14.5% YoY to $86.9 million, and adjusted operating income rose 2.7% to $87.4 million in the first quarter.

North American operations’ revenues rose 1.9% YoY to $325.6 million in the first quarter from $319.5 million. The segment’s reported operating profit rose 8.1% to $73.2 million, whereas adjusted operating income rose 0.6% YoY to $73.4 million in the first quarter.

Australian operation’s revenues rose 1.3% to $74.8 million from $73.9 million. That region’s reported operating income fell 6.9% to $16.0 million, whereas adjusted operating profit plummeted 9.3% to $16.0 million.

In GWR’s United Kingdom/European region, operating revenues went up 38.6% YoY to $174.2 million in Q1 2018 from $125.7 million in the same period last year. The reported operating loss in that region fell to $2.2 million from $8.9 million. The European region’s adjusted operating loss fell to $2.0 million from $5.5 million in Q1 2017.

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Management outlook

In regards to GWR’s United Kingdom/European operations, Jack Hellmann, the chair, president, and CEO, said, “Over the coming 12 months, we plan to incur approximately US$55 million in restructuring and related costs so as to unlock annualized savings of approximately US$18 million, with the initial benefits recognized in the second half of 2018. We believe the reorganization will not only meet strong customer demand for all of our supply chain services but also will enhance the quality and efficiency of our operations.”

ETF discussion

Investors that are optimistic about transportation and logistics stocks can opt to invest in the SPDR S&P Transportation ETF (XTN). This ETF invests 43.3% of its holdings in major US airline (DAL) (JBLU) companies and 13.1% in prominent US railroad (NSC) companies.


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