DOW JONES NEWSWIRES
Genesee & Wyoming Inc.'s (GWR) second-quarter earnings rose
a better-than-expected 51% as the railroad operator continued to
benefit from improved traffic.
The company, which operates short-line and regional freight
railroads in the U.S., Canada, Australia and the Netherlands, also
signed a deal to acquire the Arizona Eastern Railway from Iowa
Pacific Holdings LLC of Chicago for $90.1 million. The railway
primarily provides service to miner Freeport-McMoRan Copper &
Gold Inc.'s (FCX) largest North American copper mine and its North
American smelter.
Genesee has continued to benefit this year as a manufacturing
rebound and uneven economic recovery boost freight deliveries.
However during the first quarter, harsh weather contributed to the
bottom line missing company estimates.
"Our business strengthened over the course of the quarter,
thereby supporting our outlook for the second half of 2011,"
President and Chief Executive Jack Hellmann said.
Genesee reported a profit of $31.1 million, or 73 cents a share,
up from $20.6 million, or 49 cents a share, a year earlier. Revenue
climbed 32% to $209.6 million. The company in April projected 70
cents and revenue of $200 million to $205 million.
Operating margin rose to 24.4% from 23.9%.
The company's effective tax rate declined to 26.8% from
36.8%.
Same-railroad freight revenue grew 11% and was up 8.4% excluding
currency fluctuations.
Total traffic increased 15% as same-railroad traffic improved
5.3%, excluding FreightLink acquisition impacts, amid increased
shipments of coal and coke, farm and food products and other
goods.
Shares closed Monday at $54.99 and were inactive premarket. The
stock is up 35% in the past year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com