* Q4 adj EPS $0.40 vs est. $0.37
* Q4 rev down 6 pct
* Sees Q1 EPS $0.33-$0.35, rev $140 mln-$145 mln
* Sees 2010 EPS about $1.50, rev $580 mln-$600 mln
* Shares rise as much as 2 pct
(Adds analyst comments, details)
By Bijoy Anandoth Koyitty
BANGALORE, Feb 8 (Reuters) - Railroad operator Genesee & Wyoming Inc (GWR.N) posted forecast-beating quarterly results, helped by a rise in non-freight revenue, and sees full-year revenue above estimates on a stabilizing 2010.
“The big picture underlying our 2010 guidance is a stabilizing but not yet growing North American economy and an improved grain harvest in Australia,” the company said on a conference call with analysts.
For 2010, the company expects earnings of about $1.50, on revenue of $580 million to $600 million. It said short-line tax credit extension would reduce tax rate to 28 percent and increase earnings by 25 cents in 2010. [ID:nWNAB4444]
The company also forecast first-quarter earnings of 33 to 35 cents a share, assuming effective tax rate of around 37 percent, on revenue of $140 million to $145 million. [ID:nWNAB4454]
“The first-quarter expectations were a little bit on the surprise. We thought it might start slow and build... But they are expecting grain shipping to pick up in February and March, probably providing little bit of a boost,” said Jason Seidl, an analyst with Dahlman Rose & Co.
The company also said it was actively looking at several mergers and acquisition opportunities, especially in natural resources.
“We are generally looking at cash or incremental debt. We are very comfortable doing in excess of a couple hundred million dollars in acquisitions right now,” Chief Executive John Hellmann said on the call.
The company said it has a letter of intent for a North American natural resource project. [ID:nWNAB4450]
"After a look at the conference call, I am walking away more confident than I was going into it, that is for sure... I think investors were generally encouraged by what they heard on the call," Seidl said, adding that "the shares were trading up in a market .DJI that was down."
Genesee & Wyoming operates railroads in the United States, Canada, Australia and the Netherlands, and transports commodities such as coal, paper, metals and minerals.
For the three months ended Dec. 31, the company reported earnings of $18.3 million, or 44 cents a share, compared with earnings of $25.3 million, or 70 cents a share in the year-ago period.
The fourth quarter included gains on the sale of assets of 1 cent a share and a tax benefit of 3 cents a share.
Revenue fell 6 percent to $139.9 million. Non-freight revenue rose 7 percent to $57.8 million. Operating expenses fell 5 percent.
Analysts on average were expecting earnings of 37 cents a share, before items, on revenue of $132.7 million, according to Thomson Reuters I/B/E/S.
Shares of the company were nearly flat at $29.38 Monday afternoon on the New York Stock Exchange. (Reporting by Bijoy Koyitty in Bangalore; Editing by Aradhana Aravindan)