Genesee & Wyoming experienced a weaker-than-expected fourth quarter in 2013, according to its chief executive officer, though income numbers show significant gains from the year before.
Total operating revenues for the year jumped 72 percent to $391.7 million. Adjusted income from operations increased 65 percent to $95.7 million, and reported income leaped by 181 percent to $94.8 million.
“The overall trajectory of our business continues to be positive, with adjusted diluted EPS increasing 19 percent in the fourth quarter of 2013,” said president and CEO Jack Hellmann in a news release. “However, G&W’s fourth quarter financial results were weaker than we expected. While carload levels were consistent with our expectations, with the exception of delayed movements in Australian grain, our operating income was lower than projected for three main reasons.”
Hellmann cited those reasons as the strengthening of the U.S. dollar, which reduced income translation from Australia and Canada; two costly derailments in the fourth quarter; and unusually high diesel fuel consumption due to the extreme cold in the U.S. and Canada.
An analysis by Cowen and Company expanded on the triple impact.
“These three items had a roughly $7.5 MM negative impact on operating income. Excluding such headwinds, the operating income would have been just $2.5 MM below the company's own expectations," the firm said in an investor note.
However, G&W reported a net income $58.1 million in the fourth quarter of 2013, compared to $13.4 million in 2012.
For the entire year, reported net income is $272.1 million, compared with $52.4 million at the end of 2012.