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Yesterday, RailAmerica Inc. reported first-quarter earnings from continuing operations of $6 million, a 28 percent increase compared with first-quarter 2004.

Quarterly consolidated revenue from continuing operations rose 14.7 percent to $110.1 million. On a "same railroad" basis, first-quarter revenue increased 9.1 percent. Quarterly net income of $6.2 million rose almost 400 percent compared with the same 2004 period.

However, quarterly consolidated operating income dropped 27 percent to $11.6 million and the short-line holding company’s operating ratio worsened 5.9 points to 89.4 compared with first-2004 quarter. RailAmerica officials attribute the operating ratio decline to higher fuel and casualty expenses, and operating costs associated with the recently acquired Midland Subdivision.

“While fuel remains a challenge, 60 percent of our consumption is protected, 30 percent by hedges and 30 percent by fuel surcharges,” said Michael Howe, RailAmerica executive vice president and chief financial officer, in a prepared statement.

RailAmerica owns and operates 44 regionals and short lines in the United States and Canada.