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Rail News: Financials

RailAmerica ramped up revenue, registered higher costs


Yesterday, RailAmerica Inc. reported fourth-quarter 2011 revenue of $147.3 million, up 15 percent compared with fourth-quarter 2010 results. Freight revenue increased 5 percent to $103.3 million and non-freight revenue jumped 48 percent to $44 million, while carloads dipped 2 percent to 211,848.

In addition, operating income dropped 15 percent to $37.2 million, net income fell 16 percent to $15 million, operating expenses climbed 24 percent to $110 million and the operating ratio rose 9 points to 74.7. Expenses reflect higher purchased services and material costs primarily due to growth in engineering services, while operating income excludes the impact of the Section 45G short-line tax credit benefit, asset sales and impairments, RailAmerica officials said in a prepared statement.

“Operating income excluding 45G credits, impairments and asset sales increased 30 percent in the fourth quarter. This strong increase was driven by continued execution of our pricing and productivity initiatives combined with excellent non-freight revenue growth led by Atlas [Railroad Construction]," said RailAmerica President and Chief Executive Officer John Giles.

For the full year, operating revenue increased 12 percent to $551.1 million and net income nearly doubled to $36.9 million compared with 2010 results. Operating income rose 6 percent to $121.6 million, operating expenses climbed 14 percent to $429.5 million and the operating ratio increased 1.3 points to 77.9.

“We have achieved excellent traction in corporate development and continue making strides in reducing our debt costs,” said Giles, adding that RailAmerica last week announced agreements to acquire Marquette Rail L.L.C. and gain controlling investments in Wellsboro & Corning Railroad and Industrial Waste Group.

The company currently owns and operates 43 regionals and short lines in the United States and Canada. In addition, RailAmerica owns Atlas Railroad Construction, which provides various rail infrastructure services.

Contact Progressive Railroading editorial staff.

More News from 2/9/2012