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Officials at Pioneer Railcorp figured 2002's financial performance would be a tough act to follow, and it has been.

After recording the best year in the short-line holding company's 16-year history, Peoria, Ill.-based Pioneer posted third-quarter net income of $218,000, a 20.4 percent decline compared with $374,000 in third-quarter 2002. For 2003's first nine months, Pioneer had net income of $993,000, a 12.4 percent decrease compared with $1.134 million during the same 2002 period.

At $3.9 million, third-quarter revenue decreased less than 1 percent compared with $3.93 during the same period last year. Higher freight revenue generated from railroad operations and the company's rail-car fleet drove the increases, according to a Pioneer prepared statement. For 2003's first nine months, Pioneer recorded revenue of $11.63 million, a 2 percent hike compared with the same period last year.

For the quarter, Pioneer recorded operating expenses of $3.29 million, up 10 percent from $2.98 million in the prior year. Increased maintenance expenses, accounting and legal fees, and liability insurance costs pushed the expense envelope. For the year's first nine months, Pioneer had operating expenses of $9.38 million, an 8 percent increase from the same period last year. Key factors: Additional first-quarter fuel expenses due to an increase in fuel inventory to offset price increases that could have occurred as a result of the U.S.-Iraqi war, and increased depreciation expense as a result of "significant track upgrades," according to Pioneer’s statement.

Pioneer owns 16 short lines that operate in 10 states over 463 track miles.