Genesee & Wyoming reported net income of $66.2 million in the third quarter of 2013, compared with a net loss of $19.6 million in the same period last year.
“The third quarter of 2013 was the third reporting period in which G&W’s consolidated results included the former RailAmerica railroads,” said Jack Hellmann, president and CEO of G&W, in a written statement.
Quarterly revenue for G&W was $401.4 million, jumping 80.2 percent from $222.7 million in the third quarter of 2012. The increase included $160.5 million in revenue from new operations, specifically the acquisition and integration of RailAmerica. Quarterly railroad freight revenue for G&W was $179.0 million, compared with $160.6 million in the third quarter of 2012. Railroad non-freight revenue in the third quarter was $61.9 million, up from $62.1 million.
Revenue for the combined company, which includes comparisons as though the RailAmerica railroads were owned by G&W in 2012, was up 7.5 percent year-over-year, totaling $401.4 million, driven by volume and pricing increases, according to Stifel Transportation & Logistics Research Group. Freight revenue was up 10.1 percent, at $298.9 million, driven by a 6.8 percent increase in carload traffic and a 3.1 percent increase in revenue per unit, the research institute said.
G&W’s traffic was 482,823 carloads in the third quarter, including 422,770 carloads from North American and European operations and 60,053 carloads from Australian operations.
The company’s operating ratio in the third quarter of 2013 was 74.7 percent, compared with an operating ratio of 76.3 percent in the third quarter of 2012.
Stifel said G&W’s results were below expectations in the third quarter, as the company elected to incur some one-time expenses to upgrade facilities, equipment and track at RailAmerica railroads, as well as hire and train new crews at those railroads to support growth and to improve the safety and operating culture.
In the first nine months of 2013, G&W’s profit was $214.0 million, up from $39.0 million in the first nine months of 2012. Revenue from January to September was $1.18 billion, versus $647.6 million in the same period in the previous year.
“As we enter the fourth quarter, our business remains strong and we are actively working on new business development opportunities in both North America and Australia,” Hellmann concluded. “In addition, the acquisition market is active in multiple geographies and we will continue to pursue the right opportunities at the appropriate valuations.”
The company predicted in its third quarter earnings call, transcribed by Seeking Alpha, that traffic in the fourth quarter will be in the range of 470,000 to 480,000 carloads, up around 8 percent year-over-year, driven by coal and coke, agricultural products, petroleum products, metallic ores and minerals and stone. Additionally, G&W said it expects revenue to be approximately $400 million.