Genesee & Wyoming Inc.’s fourth-quarter earnings (excluding 6 cents from non-recurring items) of $1 per share surpassed the Zacks Consensus Estimate of 90 cents. The bottom line also improved 29.9% on a year-over-year basis. Results were aided by an impressive performance at the North American segment.
Operating revenues inched up 0.7% year over year to $575.6 million, which outpaced the Zacks Consensus Estimate of $569.9 million. Freight revenues accounting for bulk (69.7%) of the top line rose 2.3% to $401.22 million. Meanwhile, freight-related revenues contributing to 24.8% of the top line slid 2.2% to $142.55 million. The balance came from ‘other revenues’.
Genesee & Wyoming’s outperformance in the fourth quarter pleased investors. Evidently, shares of the company gained more than 2% at the close of business on Feb 6.
Total operating expenses (on a reported basis) rose 1% to $469.94 million, mainly due to higher labor-related costs. Operating income (on a reported basis) was down slightly to $105.65 million in the reported quarter. The metric, on an adjusted basis, increased 5.6% to $109.9 million.
During 2018, Genesee & Wyoming repurchased 6 million shares worth $460.1 million.
Segmental Results
Geographically, operating revenues from North American operations increased 5.5% in the quarter under discussion. However, the same from the company’s Australian (51.1% owned) and U.K./European operations decreased 5.8% and 5.3%, respectively. Notably, North American, Australian and U.K./European operations represented 58.7%, 12.4% and 28.9% each of the total operating revenues in the quarter under review.
At the North American unit, adjusted operating ratio (operating expenses as a percentage of revenues) improved 280 basis points to 73.6% in the fourth quarter. Notably, lower the value of the metric, the better. At its Australian operations, the same deteriorated 490 basis points to 75.1%. Also, at the U.K./European operations, adjusted operating ratio decreased 160 basis points to 98.3%. On a consolidated basis, the metric stood at 80.9% compared with 81.8% a year ago.
2019 Outlook
The company expects earnings to grow in double digits during the current year. Earnings per share are envisioned in the range of $4.30-$4.50 in 2019. The Zacks Consensus Estimate for the same stands at $4.52. Additionally, operating revenues are estimated to be $2.36 billion in the ongoing year. However, the Zacks Consensus Estimate for the same is pegged higher at $2.46 billion. Operating ratio is forecast between 80% and 81% in 2019. Adjusted free cash flow is predicted to be $300 million. Meanwhile, tax rate is estimated to be 27% for the full year. Also, total capital expenditures in 2019 are projected to be $280 million compared with $251 million in 2018.
Operating revenues in the North American segment are anticipated in the band of $1,380-$1,400 billion. Meanwhile, the same for Australian and U.K./Europe operations are forecast to be within $285-$295 million and $670-$690 million, respectively.
Zacks Rank & Key Picks
Genesee & Wyoming carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are CSX Corporation (CSX - Free Report) , Canadian Pacific Railway Limited (CP - Free Report) and Union Pacific Corporation (UNP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of CSX, Canadian Pacific and Union Pacific have rallied more than 34%, 16% and 28%, respectively, in a year.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
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Genesee & Wyoming Inc.’s fourth-quarter earnings (excluding 6 cents from non-recurring items) of $1 per share surpassed the Zacks Consensus Estimate of 90 cents. The bottom line also improved 29.9% on a year-over-year basis. Results were aided by an impressive performance at the North American segment.
Operating revenues inched up 0.7% year over year to $575.6 million, which outpaced the Zacks Consensus Estimate of $569.9 million. Freight revenues accounting for bulk (69.7%) of the top line rose 2.3% to $401.22 million. Meanwhile, freight-related revenues contributing to 24.8% of the top line slid 2.2% to $142.55 million. The balance came from ‘other revenues’.
Genesee & Wyoming’s outperformance in the fourth quarter pleased investors. Evidently, shares of the company gained more than 2% at the close of business on Feb 6.
Total operating expenses (on a reported basis) rose 1% to $469.94 million, mainly due to higher labor-related costs. Operating income (on a reported basis) was down slightly to $105.65 million in the reported quarter. The metric, on an adjusted basis, increased 5.6% to $109.9 million.
During 2018, Genesee & Wyoming repurchased 6 million shares worth $460.1 million.
Segmental Results
Geographically, operating revenues from North American operations increased 5.5% in the quarter under discussion. However, the same from the company’s Australian (51.1% owned) and U.K./European operations decreased 5.8% and 5.3%, respectively. Notably, North American, Australian and U.K./European operations represented 58.7%, 12.4% and 28.9% each of the total operating revenues in the quarter under review.
At the North American unit, adjusted operating ratio (operating expenses as a percentage of revenues) improved 280 basis points to 73.6% in the fourth quarter. Notably, lower the value of the metric, the better. At its Australian operations, the same deteriorated 490 basis points to 75.1%. Also, at the U.K./European operations, adjusted operating ratio decreased 160 basis points to 98.3%. On a consolidated basis, the metric stood at 80.9% compared with 81.8% a year ago.
2019 Outlook
The company expects earnings to grow in double digits during the current year. Earnings per share are envisioned in the range of $4.30-$4.50 in 2019. The Zacks Consensus Estimate for the same stands at $4.52. Additionally, operating revenues are estimated to be $2.36 billion in the ongoing year. However, the Zacks Consensus Estimate for the same is pegged higher at $2.46 billion. Operating ratio is forecast between 80% and 81% in 2019. Adjusted free cash flow is predicted to be $300 million. Meanwhile, tax rate is estimated to be 27% for the full year. Also, total capital expenditures in 2019 are projected to be $280 million compared with $251 million in 2018.
Operating revenues in the North American segment are anticipated in the band of $1,380-$1,400 billion. Meanwhile, the same for Australian and U.K./Europe operations are forecast to be within $285-$295 million and $670-$690 million, respectively.
Zacks Rank & Key Picks
Genesee & Wyoming carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are CSX Corporation (CSX - Free Report) , Canadian Pacific Railway Limited (CP - Free Report) and Union Pacific Corporation (UNP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of CSX, Canadian Pacific and Union Pacific have rallied more than 34%, 16% and 28%, respectively, in a year.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
See Stocks Today >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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