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In the second quarter, Pioneer Railcorp earned net income of $342,000 compared with $338,000 in second-quarter 2002, primarily because of a 28 percent drop in interest expenses. However, quarterly operating income decreased 6 percent to $810,000.

Quarterly revenue increased 2 percent and operating expenses, 4 percent, compared with the same 2002 period.

During the year's first six months, the short-line holding company earned $775,000 in net income and $1.6 million in operating revenue compared with $760,000 and $1.7 million, respectively, during the same 2002 period.

Pioneer Railcorp attributes the operating-income drop to a 14 percent increase in maintenance-of-way expenses and 19 percent rise in transportation expenses, primarily because of fuel prices, according to a prepared statement.

First-half revenue increased 4 percent and operating expenses rose 7 percent compared with 2002's first half.

Meanwhile, Providence and Worcester Railroad Co. reported second-quarter net income of $389,000 compared with a net loss of $318,000 in second-quarter 2002. Quarterly operating revenue was flat at $6.2 million, but operating expenses dropped from $6.9 million to $5.8 million.

During the year's first six months, the regional reported a net loss of $117,000 compared with a net loss of $631,000 during the same 2002 period. Operating revenue dropped slightly from $11.2 million to $11.1 million, but operating expenses fell from $12.7 million to $11.5 million.