Across the United States, studies show that messy desks and time wasted while looking for misplaced items cost corporate enterprises $177 billion every year. However, this wasn’t the biggest problem facing some of Rochester’s most prominent businesses, as severe winter weather and declining prices took their toll. But despite this, at least one company reported higher-than-expected profits, generating optimistic predictions for the coming months.
On Friday, May 1, Genesee and Wyoming Inc. reported that the harsh winter and a decline in certain commodity shipments had affected their first-quarter results. However, the international freight railroad operator said that despite these challenges, its operating revenues reached $397 million, a 6% increase from the $376.3 million they earned in the first quarter of 2014. Accordingly, adjusted diluted earnings per share increased nearly 19% to 83 cents, up from 7 cents a share a year ago. Analysts had estimated that the company would generate adjusted diluted earnings per share of only 81 cents on revenues of $376.84 million.
GandW’s revenue increases were connected to $37 million in profits from new operations, including its recent purchase of Rapid City, Pierre and Eastern Railroad Inc. and Pinsly Arkansas. However, traffic increases were also responsible for its success, with traffic in the first quarter rising by 9,358 carloads, or 2%. Unfortunately, railroad traffic also decreased more than 3% in the first quarter due to falling numbers in metals traffic, coal and coke, and waste traffic.
But while the outlook is largely positive, GandW representatives say that the company will have to continue to structure its business around its international interests, with many of its decisions dependent on geography. For example, while President and CEO Jack Hellman stated that the company’s overall economic activity in North America is believed to be stable, they are expecting continued weakness in utility coal, steel, scrap and shale-energy related shipments. Meanwhile, the company remains hampered by challenging business conditions in Australia, as mines in the country continue to close. However, with approximately $480 million of capacity available under the company’s revolving credit facility, as well as a well-organized business structure, Hellman says GandW is continuing to evaluate potential investments and acquisition opportunities around the world.
GandW is based out of Darien, CT, but has its administrative base in Rochester. The company owns and operates short-line and regional freight railroads in several countries, including the U.S., Canada, the Netherlands and Australia. The company reportedly has around 7,700 employees worldwide.