(Adds outlook, conference call details, background, updates share movement)
By Aniruddha Basu
BANGALORE, Feb 13 (Reuters) - Genesee & Wyoming Inc (GWR.N) posted better-than-expected quarterly earnings and forecast strong first-quarter and 2008 results as the railroad operator expects to combat a U.S. slowdown by reaping benefits in 2008 from several projects it invested in over the past year.
Shares of the company, which operates short line and regional freight railroads in the United States, Canada and Australia, rose as much as 11 percent to a high of $30.12 in afternoon trade on the New York Stock Exchange.
The company reported fourth-quarter earnings from continuing operations of 40 cents a share. Revenue rose 14.3 percent to $134.5 million. Analysts expected a profit of 34 cents a share, before items, on revenue of $125.7 million, according to Reuters Estimates.
Genesee & Wyoming's fourth-quarter results were driven by higher coal shipments, a jump in exports through its port railroads and increased revenue per carload.
Despite a slump in the U.S. housing and paper markets as well as a drought in Australia, the company's revenues in the fourth quarter rose in nine out of eleven commodity groups, Chief Executive John Hellmann said in a statement.
The company freights a range of commodities, including pulp and paper, coal, coke and ores, metals, farm and food products, minerals and stone, and petroleum products.
Genesee & Wyoming's freight revenue, helped by a rise in the Australian and Canadian currencies relative to the U.S. dollar, jumped 9 percent during the fourth quarter.
Genesee & Wyoming expects new business in 2008 from an ethanol plant in Oregon, increasing ore and mineral shipments in South Australia and rising traffic on the Commonwealth Railway from a new terminal in Portsmouth, Virginia.
The company, based in Greenwich, Connecticut, expects first-quarter earnings of 40 cents a share on revenue of about $138 million, Chief Financial Officer Timothy Gallagher said in a conference call with analysts.
Two analysts on average expect earnings of 36 cents a share before items, on revenue of $134.9 million, according to Reuters Estimates.
Genesee & Wyoming expects full-year earnings of $1.65 to $1.75 a share on revenue of about $560 million, CFO Gallagher said. Analysts expect earnings of $1.61 a share, excluding items, on revenue of $550.1 million.
Capital expenditures are expected to be about $60 million for 2008.
CEO Hellman said the company was concerned with the paper and forest products volumes in the Canada region, which has been hurt by a dull U.S. housing market, sluggish paper market and a strong Canadian dollar that makes Canadian exports less competitive.
Shares of the company trade at more than 18 times forward earnings, compared with the Railroads sector which is at a multiple of just more than 16.
The stock has risen about 23 percent in 2008, and was trading up $2.72 at $29.48 in afternoon trade on Wednesday. (Editing by Pratish Narayanan)