Genesee & Wyoming’s profit was nearly flat at $22.2 million in the first quarter, as an expiration of a tax credit and weak coal traffic offset an 8.1 percent year-over-year rise in revenue.
The short-line rail operator said revenue rose to $207 million, with North American and European freight revenue expanding 9 percent despite a 20 percent drop in coal business. The steep decline in coal traffic mirrors the slump seen by Class I railroads in the first quarter.
“In North America, our non-coal traffic continues to grow and our newly acquired Arizona Eastern Railway and Hilton & Albany Railroad are performing well,” said President and CEO Jack Hellmann. “Although our U.S. coal traffic is weak, primarily due to warm winter weather and low natural gas prices, we expect some improvement in the second quarter as shipments resume at two power plants.”
Despite the decline in coal volume, the operating ratio of North American and European operations improved 1.3 percentage points to 78.3 percent. This well positions the company for when volume improves, Hellmann said.
North American and European freight volume slipped 10.3 percent to 174,256 carloads in the first quarter from the same period a year ago. The average freight revenue per carload, a key measure of pricing, rose 17.1 percent year-over-year in the first quarter.