Genesee & Wyoming Inc. (GWI) (NYSE: GWR) reported net income in the first quarter of 2012 of $22.2 million, compared with net income of $22.1 million in the first quarter of 2011. GWI's diluted earnings per share (EPS) in the first quarter of 2012 were $0.52 with 43.1 million weighted average shares outstanding, compared with diluted EPS of $0.52 with 42.5 million weighted average shares outstanding in the first quarter of 2011.
GWI’s effective tax rate was 35.6% in the first quarter of 2012, as compared to 27.7% in the first quarter of 2011. The higher tax rate in the first quarter of the current year was driven primarily by the expiration of the Short Line Tax Credit on December 31, 2011.
Comments from Jack Hellmann, our Chief Executive Officer
Jack Hellmann, President and CEO commented, “Our financial results for the first quarter of 2012 were consistent with our expectations. While revenues increased 8% to $207 million, our net income was unchanged for three main reasons: the expiration of the U.S. short line tax credit; weak coal shipments in the United States; and a 60-day outage on a portion of our main line in Australia due to the washout of our Edith River Bridge. For our North American & European Operations, despite a 20% drop in coal revenues, our first quarter revenues still increased 9% and our operating income increased 16%.”“As we look ahead to the remainder of 2012, we expect improving business trends. In North America, our non-coal traffic continues to grow and our newly acquired Arizona Eastern Railway and Hilton & Albany Railroad are performing well. Although our U.S. coal traffic is weak, primarily due to warm winter weather and low natural gas prices, we expect some improvement in the second quarter as shipments resume at two power plants. The fact that our North American & European Operations operating ratio improved 1.3 percentage points to 78.3% in the first quarter of 2012 despite the decline in our coal traffic also means that we are well positioned to benefit from any future improvement in shipments.”
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