(The following story by Divya Sharma appeared on the Reuters Canada website on October 4, 2010.)
BANGALORE (Reuters) — Short-line railroad operator RailAmerica Inc RA.N said its unit RaiLink Canada signed a five-year deal with Canadian Pacific Railway (CP.TO: Quote) to operate a portion of the Ottawa Valley Railway (OVRR) line.
RailAmerica, which operates 7,300 miles of track in 27 U.S. states and three Canadian provinces, expects the agreement to result in a positive contribution to net income.
In December 2009, RailAmerica had terminated its lease with rail-road operator Canadian Pacific on the OVRR, which primarily transports pulp, paper and allied products.
RailAmerica will adjust historical financial statements to reflect OVRR as a continuing operation, the company said.
For the January-June period, the effect of this adjustment was $0.7 million of income, previously reported in discontinued operations, it said. RailAmerica had reported net loss of $6.7 million for the six-month period.
Shares of the Jacksonville, Florida-based company closed at $9.24 Friday on the New York Stock Exchange. The stock, which touched a new-year low of $9.20 Friday, has lost 7 percent of its value in less than two months.