G&W nearly triples earnings in 2017

Short-line and regional railroad operator Genesee & Wyoming (G&W) posted a net income of $549.1 million for the year, a 289 percent increase from 2016, according to the company’s latest financial statements.    Darien, Conn.-based short-line and regional railroad operator Genesee & Wyoming (G&W) nearly tripled its earnings last year, thanks in part to a strong fourth quarter that was boosted by a $372 million tax benefit.
   According to the company’s latest financial statements, G&W posted a net income attributable to the company of $426.6 million in the fourth quarter, a significant increase to say the least compared with the $8.9 million profit reported during the same 2016 period.
   Diluted earnings per share (EPS) for the quarter jumped from just $0.15 per share in Q4 2016 to $6.81 per share on revenues that grew 10.7 percent year-over-year to $571.6 million compared.
   For the full year, the company saw its earnings soar 289 percent to $549.1 million ($8.92 per share), as revenues climbed 10.3 percent to $2.21 billion.
   Jack Hellmann, president and CEO of G&W, attributed the strong fourth quarter performance primarily to a $372 million benefit stemming from recently enacted federal tax reform in the United States. The Tax Cuts and Jobs Act, passed in December, effectively cut the federal tax rate for U.S. corporations from 35 percent to 21 percent.
   “Excluding the tax benefit and certain other items, our adjusted diluted EPS were $0.77 in the fourth quarter, as revenues in each of our geographic segments, North America, Australia and the U.K./Europe, finished the year in-line with our expectations,” Hellmann said.
   “In 2017, we generated adjusted free cash flow attributable to G&W of $250 million, a 3.6 percent increase over 2016, as we effectively managed both expenses and capital expenditures to more than offset flat revenue,” he added.
   Looking ahead to 2018, Hellmann said the company expects to see double-digit growth in both adjusted EPS and adjusted free cash flow attributable to G&W thanks to an “improving business outlook” in each of the company’s operating regions.
   He noted that G&W also has $400 million in borrowing capacity and the company continues to evaluate acquisition and investment opportunities across its global portfolio of railroads.