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Taking a hit from $39.5 million in refinancing expenses and $12.6 million in costs associated with selling the E&N Railway in British Columbia, RailAmerica Inc. reported a third-quarter loss from continuing operations of $30.6 million compared with a $7 million gain in third-quarter 2003.

Yesterday, the short-line holding company also reported a quarterly net loss of $33.1 million compared with net income of $4.2 million for the same 2003 period. The North American Rail Group's quarterly operating ratio worsened 7.2 points to 82.4.

"In addition to record fuel prices, one of our greatest challenges this quarter and in 2004 has been higher casualty expense due to derailments," said RailAmerica Chief Executive Officer Charles Swinburn in a prepared statement. "While the number of derailments in 2004 is down approximately 9 percent from 2003, our average cost per derailment is significantly higher this year. We are currently working with an industry expert to review our safety program and to assist us in the implementation of an action plan."

In the good news department, RailAmerica's quarterly consolidated revenue from continuing operations rose 11 percent to $100 million and "same railroad" operating revenue increased 6.5 percent to $95.5 million compared with third-quarter 2003.

"Although the third quarter presented challenges, significant goals were accomplished," said Swinburn. "We completed our sale of Freight Australia for $204 million … eliminated $174 million of debt from our balance sheet and reached our net debt-to-capital goal of 50 percent."

During 2004's first nine months, RailAmerica's operating revenue rose 12.4 percent to $292 million compared with the same 2003 period. However, the company reported a loss from continuing operations of $25.4 million and a net loss of $30.3 million compared with a $19.3 million gain and net income of $13.3 million, respectively, during the same period last year.