August 2, 2018
GWR joined the list of rails reporting Q2/18 earnings that beat consensus estimates and cruised far past last year’s results - now only BNSF remains between you lot and my Q2/18 RR Earnings Review. Earnings came in at 4% and 4 cents above last year’s and Q2/18 Guidance, and about 2 cents above consensus. That they were helped – a lot – by the tax cut doesn’t detract from their obvious optimism on their webcast about the demand side and their ability, in future, to bring in 50%+ incremental margins, on the one hand. And on the other it adds dry powder to their choice between more share buybacks and/or more M&A – and in regard to the latter, their recent (“favorable” ) ruling on the CSX “proceeding”, final decision due soon, may bring them back into the game with the current Class One short line sales leader. And that would be big news indeed….