G&W posts Q4 revenue, income growth; forms alliance with Cargomatic

Genesee & Wyoming Inc. reported fourth-quarter 2017 operating revenue rose 10.7 percent to $571.6 million compared with the same quarter in 2016.

Operating income increased 101.9 percent to $108.2 million, while adjusted operating income climbed 2.2 percent to $105.7 million.

Net income for the quarter was $426.6 million, compared with $8.9 million in Q4 2016.

G&W's diluted earnings per share (EPS) were $6.81 with 62.7 million weighted average shares outstanding, compared with reported diluted EPS in Q4 2016 of 15 cents with 58.8 million weighted average shares outstanding. The adjusted diluted EPS fell 8.3 percent to 77 cents.

The Q4 2017 net income and diluted EPS include a $371.9 million, or $5.94 per share, income tax benefit associated with the U.S. Tax Cuts & Jobs Act that became law in the quarter.

G&W President and Chief Executive Officer Jack Hellmann said revenue in each of the company's geographic segments — North America, Australia and U.K./Europe — finished the year in line with expectations.

"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," said Hellmann in a press release.

With an improving business outlook in each operating region, the company anticipates double-digit growth in adjusted EPS and adjusted free cash flow, he said.

"At the same time, we continue to evaluate acquisition and investment opportunities across G&W's global footprint and have approximately $400 million of borrowing capacity under our revolving credit facility," Hellmann added.

For the full year 2017, G&W posted net income of $549.1 million, compared with $141.1 million for full-year 2016. Adjusted net income in 2017 was $182.0 million, compared with $182.4 million in 2016.

Meanwhile, G&W announced Feb. 8 it has invested in and formed a strategic alliance with Cargomatic Inc., a technology platform that connects shippers and truck carriers focused on short-haul markets.

Terms of the investment were not disclosed.

The Cargomatic platform is designed to facilitate increased truck capacity and real-time shipment tracking, and help manage the intricacies of drayage and short-haul trucking for intermodal and breakbulk commodities.

"In addition to our investment in Cargomatic, we are pleased to add the Cargomatic platform as an extension of G&W's rail service at terminal and transload locations across G&W's U.S. rail network and to work with the Cargomatic team as they expand internationally to Europe and Australia," said G&W Chief Commercial Officer Michael Miller in a press release.