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10/29/2010



Rail News: Rail Industry Trends

RailAmerica drives up 3Q revenue and traffic, scores Nova Scotia funding pact


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On Wednesday, RailAmerica Inc. reported third-quarter revenue of $128.3 million and freight revenue of $97.7 million, up 16 percent and 11 percent, respectively, compared with third-quarter 2009 figures. Income from continuing operations more than doubled to $8 million, operating income rose 11 percent to $28.5 million and carloads increased 5 percent to 219,499 units.

“These strong results were driven by our continued focus on operating efficiency and solid revenue growth,” said RailAmerica President and Chief Executive Officer John Giles in a prepared statement.

Third-quarter operating expenses increased 18 percent to $15.2 million because of higher volume, the Atlas Railroad Construction Co. acquisition and absence of short-line tax credit benefits in the quarter, RailAmerica officials said.

Meanwhile, the company — which owns and operates 40 regionals and short lines in the United States and Canada — reached an extended funding agreement with the province of Nova Scotia that will enable the Cape Breton and Central Nova Scotia Railway to continue operating until at least Sept. 30, 2011.

The $3.5 million extension is retroactive to March 31 and includes up to $3 million for an 18-month extension. An additional $500,000 is available to continue service if a transition period or further examination is needed, according to province officials.

A working group will continue to focus on the railroad’s long-term profitability. About 10,000 rail-car moves are needed each year for the short line to break even and last year, the railroad transported about 1,500 cars, province officials said.


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