Consolidated revenue from continuing operations for the second quarter of 2005 increased $14.7 million, or 15.3%, to $110.8 million, from $96.1 million in 2004. On a "same railroad" basis, revenue for the second quarter of 2005 increased $9.6 million, or 10.0%, from the second quarter of 2004.
"Same railroad" totals exclude revenue associated with railroads, or portions of railroads, sold or acquired by the Company after January 1, 2004. Consolidated operating income for the second quarter of 2005 was $15.0 million, compared to $10.7 million in 2004. The operating ratio for the second quarter of 2005 was 86.4% compared to 88.9% in the 2004 quarter.
For the six months ended June 30, 2005, the Company reported earnings from continuing operations of $15.5 million, or $0.40 per diluted share, compared to earnings from continuing operations of $4.7 million, or $0.14 per diluted share for the 2004 quarter. The 2005 results include a $0.01 per share charge from the sale of the LaHarpe - Hollis line of the Toledo, Peoria & Western Railway (TPW), and a $0.01 per share benefit from a change in the State of Ohio's tax laws. The 2004 results include the $0.16 per share charge for the former CEO's retirement.
Consolidated revenue from continuing operations for the six months ended June 30, 2005 increased $28.8 million, or 15.0%, to $220.9 million, from $192.1 million in 2004. On a "same railroad" basis, revenue for the six months ended June 30, 2005 increased $18.3 million, or 9.5%, from the six months ended June 30, 2004. Consolidated operating income for the six months ended June 30, 2005 was $26.7 million, compared to $26.5 million for the six months ended June 30, 2004.
Charles Swinburn, RailAmerica's Chief Executive Officer, said, "Overall, we are pleased with our results in the second quarter for four reasons. First, our earnings were in line with our forecast. Second, and more importantly, we are now seeing the results of the safety and training initiatives that we began late last year. Our casualty and insurance expense decreased to $4.6 million in the second quarter of 2005, from $5.1 million in the same quarter of 2004, and from $6.2 million in the first quarter of this year. Third, we have noticeably improved the operations of the Ohio Midland Subdivision.
Finally, the operating ratio improvement from the first quarter of 2005 to the second quarter was significant, and was in large part due to our accomplishments regarding safety and the Ohio operations."
Michael Howe, RailAmerica's Executive Vice President and Chief Financial Officer said, "Earlier this year, we provided 2005 guidance in the range of $0.94 to $1.02 per share. We are taking a cautious outlook for the second half of the year because of the possible negative effects of Class I congestion, equipment supply issues and decreases in traffic from the Powder River Basin. On the positive side, this may be partially offset by an increase in our expected benefit from the track maintenance tax credit. On balance, we now anticipate that our annual earnings will be $0.93 per share, plus or minus three cents."
