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Rail News Home Financials

2/16/2007



Rail News: Financials

Florida East Coast boosts revenue, profit despite drops in aggregate and automotive traffic



A soft residential construction market statewide and reduced auto production nationwide meant fewer aggregate and automotive carloads for Florida East Coast Railway (FECR) in the fourth quarter. As a result, the 351-mile regional’s carload volume decreased 6.3 percent to 47,500 units and total carload revenue dropped 2.2 percent to $31.8 million compared with fourth-quarter 2005.

However, total railway revenue inched up about 2 percent to $63.6 million in the quarter because of rate increases, which included higher fuel surcharges, and rising intermodal demand, according to financial results released by FECR parent Florida East Coast Industries Inc. (FECI). A 9 percent gain in intermodal revenue — generated by a 3.3 percent rise in traffic to 80,700 units — helped offset drops in aggregate and vehicle revenue.

Also in the good news department: Fourth-quarter railway operating profit increased 7 percent to $17.4 million and FECR’s operating ratio improved 1.3 points to 72.7 compared with similar fourth-quarter 2005 results.

For the year, FECR’s revenue rose 11 percent to $264 million, operating profit jumped 23 percent to $78.4 million and operating ratio improved 2.9 points to 70.3 compared with 2005.

For 2007, FECR officials expect revenue to range between $265 million and $280 million — anywhere from flat to a 6 percent increase — as well as operating profit to range between $72 million and $76 million, and capital expenditures to range between $42 million and $47 million.

“We expect softness at the railway in the first half of the year [and] improving fundamentals in the second half,” said FECI Chairman, President and Chief Executive Officer Adolfo Henriques in a prepared statement. “We anticipate aggregate shipments will improve over the longer term.”


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