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Rail News: Rail Industry Trends

RailAmerica, Genesee & Wyoming register 'solid' Q1 results


Driven by a “clearly improving economy,” RailAmerica Inc. posted solid first-quarter financial results, according to the short-line holding company. RailAmerica’s revenue increased 14 percent to $112.7 million and carloads rose 5 percent to 209,148 units compared with first-quarter 2009 figures. Freight and non-freight revenue each increased 14 percent to $93.1 million and $19.6 million, respectively.

“The pickup in business activity appears sustainable, and we are optimistic this year will mark our return to positive full-year carload growth for the first time since 2006,” said RailAmerica President and Chief Executive Officer John Giles in a prepared statement.

However, operating income declined 8 percent year-over-year to $18.7 million primarily because of higher fuel costs and lower fuel surcharges. Excluding the impact of the short-line tax credit monetization the company recognized in the first quarter, operating income rose 15 percent, said Giles. The company's operating ratio, excluding the tax credit benefit, was relatively flat at 83.4 vs. 83.6 in first-quarter 2009.

RailAmerica — which owns 40 regionals and short lines in the United States and Canada —also reported a quarterly loss from continuing operations of five cents per share. Operating expenses increased to $94 million vs. $78.9 million in the year-ago period.

Meanwhile, Genesee & Wyoming Inc. (GWI) reported first-quarter net income of $16 million and diluted earnings of 39 cents per share compared with $13.9 million and 38 cents, respectively, in first-quarter 2009. Total revenue rose 5.1 percent to $145.6 million even though carloads tumbled 5.6 percent to 202,368 units. Freight revenue inched up 0.4 percent to $89.6 million and non-freight revenue increased 13.6 percent to $56 million.

“In late February, our traffic began to strengthen in several commodity groups, including steel and grain,” said GWI President and CEO John Hellmann.

Quarterly operating income for the company — which owns 62 regionals and short lines in the United States, Canada, Australia and the Netherlands — rose 15.3 percent to $30.1 million. In addition, GWI’s operating ratio improved 1.8 points to a first-quarter record 79.3. However, operating expenses increased to $115.5 million vs. $112.3 million in first-quarter 2009.

“We are focused on sustaining this level of operating efficiency for the remainder of the year, regardless of the pace of improvement in the economy,” said Hellmann.

Contact Progressive Railroading editorial staff.

More News from 4/29/2010