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In the fourth quarter, Genesee & Wyoming Inc. (GWI) registered “unexpected revenue strength” in a few areas of the United States, including grain shipments in the Gulf Coast and steel pipe in the Southeast. In addition, non-freight revenue increased 7.1 percent to $57.8 million and operating expenses declined 5 percent to $112.4 million year over year.

However, the weak economy was too much to overcome for the holding company, which owns and operates 62 regionals and short lines in the United States, Canada, Australia and the Netherlands. Quarterly operating revenue decreased 6 percent to $139.9 million, freight revenue declined 13.8 percent to $82.1 million, net income dropped 28 percent to $18.3 million, diluted earnings per share fell 37 percent to 44 cents and operating income decreased 9.6 percent to $27.5 million compared with fourth-quarter 2008 figures. Plus, GWI’s operating ratio rose 0.8 points to 80.4.

Although revenue declined year over year, it was stable vs. the third quarter, said GWI President and Chief Executive Officer John Hellmann in a prepared statement.

For the full year, the company’s operating revenue decreased 9 percent to $544.9 million, income from operations tumbled 14 percent to $99.3 million, operating expenses fell 8 percent to $445.5 million and operating ratio climbed 1.1 points to 81.8 compared with 2008 totals. In addition, GWI generated $75 million in free cash flow — GWI’s second-best annual performance, said Hellmann.

“In the context of the recession, we think this is an important accomplishment,” he said. “With $106 million of cash on our balance sheet and an undrawn revolving credit facility, we continue to actively evaluate acquisition and investment opportunities in both North America and Australia.”