Rail cars push profit up 36% to $26 million

2/9/2006

Boosted by its booming rail car business, The Andersons Inc. reported a record per-share profit yesterday of $3.39 and a 36 percent earnings jump from last year.

The Maumee agribusiness posted profits of $26.1 million on revenues of $1.3 billion for 2005, up from a profit of $19.1 million, or $2.55 a share, on revenues of $1.27 billion for 2004.

The performance was even higher than the $3.37 a share the company forecast a month ago.

"The operating results our company achieved in the fourth quarter and full calendar year were impressive," said Mike Anderson, the company's president and chief executive officer.

For the fourth quarter, the company said it had a profit of $15.3 million, or $1.98 a share, on revenues of $384 million. That's up from a profit of $8.2 million, or $1.09 a share, on revenues of $370 million for the same period a year earlier.

The financial report was released after the stock markets closed yesterday, but The Andersons shares have been climbing for the past two years. The formerly $10 to $15 stock on Nasdaq surpassed $50 this year. Yesterday, it jumped $2.49 to close at a new high of $55.25.

Gary Smith, chief financial officer, said the firm's agriculture, rail, turf and specialty, and retail segments each performed very well.

But the rail group was outstanding, he said. Its operating profit was $22.8 million, or about the same as the agriculture group, the company's biggest revenue generator.

The performance can be traced to two years ago when the company acquired a rail fleet from Progress Energy Inc. "We doubled it and since then we have taken it threefold," Mr. Smith said.

The Andersons had 14,000 railcars a year ago and now has 19,000, plus several locomotives.

As demand for commodities like steel and oil has jumped, the rail business has grown to meet producers' needs for low-cost transportation, Mr. Smith said.

Contact Jon Chavez at:

jchavez@theblade.com

or 419-724-6128.