Thursday, June 11, 2009

Genesee & Wyoming cuts 2Q earnings forecast

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Greenwich, Conn.-based Genesee & Wyoming Inc. Thursday said it foresaw its second quarter profitability falling between 35 and 37 cents a share, down at least 18% from its earlier projection of 45 cents a share, due to a continuing decline in freight traffic on its 63 short line and regional railroad properties.

Analysts, on average, expected 44 cents, which has moved down 3 cents during the past two months.

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Genesee & Wyoming also lowered its revenue guidance to $130 million, compared with an earlier expectation of $140 million to $145 million. G&W expects its operating ratio to be between 81% and 83% during the quarter; it  had expected a ratio of 79% to 80%.

G&Ws overall traffic for the first two months of the second quarter fell 5.5% from the comparable period a year ago. On a same-railroad basis, measured against properties under the G&W banner one year ago and excluding recent acquisitions, traffic dipped 21.4%.

The company said it so far has furloughed 234 employees since the beginning of the year, including 70 in the current quarter. In addition, 64 of the company’s locomotives, roughly 12%, are in storage,including 17 units placed in storage since the end of the first quarter.