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Consolidated Highlights, 4Q18 vs. 4Q17
Segment Highlights, 4Q18 vs. 4Q17
“In the fourth quarter of 2018, our reported diluted EPS were $0.94 compared with $6.81 in the fourth quarter of 2017,” commented Chairman and CEO Jack Hellmann. “Our adjusted diluted EPS increased 30% to $1.00 in the fourth quarter of 2018, led by a 17% increase in our North American operating income due to 5.8% growth in carloads and a 250 basis point improvement in our operating ratio. The strong results in North America more than offset weaker performance in our Australian and U.K./European operations. For the full year, our reported diluted EPS were $4.03 in 2018 compared with $8.79 in 2017. Our adjusted diluted EPS increased 32.3% to $3.85 in 2018, and we expect double digit adjusted diluted EPS growth in 2019.”
“In addition to solid earnings growth, G&W generated record cash flow in 2018,” Hellmann noted. “With strong cash generation, which significantly exceeded our reported net income, and approximately $455 million of availability under our revolving credit facility, we continue to evaluate potential investments in multiple geographies as well as investments in our own shares. During the fourth quarter of 2018, we repurchased 2.4 million shares of our common stock for approximately $190 million.”
Genesee & Wyoming is expected to increase its capital spending slightly this year after earnings beat analyst estimates. That’s the takeaway from G&W’s earnings report, released Feb. 6, and a recent presentation at the NRC Conference in Marco Island, Fla.
G&W forecasts a capex spend of $215 million in 2019. The company spent some $205.7 million in capital last year, up dramatically from the $181.8 million of 2017. G&W Vice President Purchasing Kristine Storm told attendees at the NRC conference in January 2019 that 99% of the company’s mechanical and engineering spend is now bid by a centralized purchasing department. The idea, she said, is to increase the quality of purchasing while reducing costs.
Among the more notable programs to be bid in 2019 are:
The biggest engineering problem in 2019 for G&W involves the massive damage caused to the Bay Line Railroad by Hurricane Michael. That storm tore up miles of track and destroyed millions of dollars worth of equipment. Repairing the damage seems beyond the realm of possibility. “We’re going to plow it down and start over. That’s what I’m hearing our options are,” Storm said.
One key item to note is that maintenance-of-way and engineering vendors are required to complete a new pre-qualification form prior to competing for contracts. Details can be found on G&W’s procurement site.
Engineering Editor Paul Conley Contributed to this story.
The post G&W looks to increased capex following strong 4Q18 appeared first on Railway Age.
This article first appeared on www.railwayage.com
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