The shortline holding company’s operating income declined 9%, to $4.2 million, as revenue sank 4%, to $571.5 million, G&W said in a regulatory filing late Wednesday. Earnings per share increased 23%, to 90 cents.
On a same-railroad basis, G&W reported higher revenue and profits for its North American operations despite a 3.5% decline in traffic. Operating income rose 5%, to $84.3 million, as revenue increased 2.6%, to $333,934 on a same-railroad basis.
G&W’s North American operating ratio improved by a point, to 75.4%, for the quarter.
Traffic declined broadly at G&W’s 114 North American railroads amid a volume slump affecting the four U.S. Class I railroad systems.
“The decrease in traffic from existing operations included decreases of 11,206 carloads of coal and coke traffic, 4,221 carloads of metals traffic, 3,734 carloads of pulp and paper traffic, 2,307 carloads of lumber and forest products traffic and 1,683 carloads of other commodity traffic, partially offset by increases of 5,418 carloads of agricultural products traffic and 1,015 carloads of chemicals and plastics traffic,” G&W said in its regulatory filing.
On a same-railroad basis, G&W’s United Kingdom and European revenue grew 3%. G&W nearly halved its operating losses in Europe to $1.7 million from $3 million a year ago amid a restructuring effort.
Australian traffic dipped 9% and revenue sank 16%. Operating income Down Under tumbled 56% due to the impact of one-time items that included foreign currency depreciation, a drought that affected grain volumes, and contract changes.
G&W is selling its 49% stake in Australian operations to its partner. The deal coincides with Brookfield Infrastructure Partners’ $8.4-billion acquisition of G&W that was announced in July.
Both transactions are expected to close late this year, subject to regulatory approval.
G&W has suspended quarterly management earnings calls with investors and analysts.
Well coal traffic has virtually stopped in the UK . That will affect Freightliner uk as they had quite a share if the market. Apart from Stone traffic as they have just won a contract from Merehad to Acton along with 6 30year old class 59’s the first EMD loco’s imported which they are looking at selling and left with container and odd intermodal as the market is very fierce with DRS. DB. COOLAS FREIGHTLINER all fighting for this and maintenance track work . Would not be surprised if they sell it but it does generate a healthy profit
Won’t be long before they pull out of Europe & UK, I bet. And they’re already pulling out of one of the Savannah lines, which Watco will run as the Savannah & Old Fort. Not the only new railroad Watco has starting up now either. And RJC is growing too.
“G&W has suspended quarterly management earnings calls with investors and analysts.”
Yep, until after its sale is complete and the execs get their retirement parachutes. The parachutes will be tossed in with the losses as an acquisition expense and written off.
Look for more line sales and layoffs.