Soft real estate and auto markets cut net income at Florida East Coast Industries in half in the first quarter.
Consolidated revenue fell to $107.7 million in the first quarter, compared to $136.1 million for the comparable period in 2006. Net income dropped 52 percent from $18.7 million to $9 million.
FECI reported its first quarter results one day after announcing that private equity firm Fortress Investment Group would acquire the company, including its commercial real estate branch and its regional freight railroad.
First quarter Florida East Coast Railway revenue was $59.8 million, a decrease of $7.3 million or 11 percent, from the first quarter of 2006. The decline was primarily due to a softening of the Florida residential construction market and reduced vehicle traffic from domestic manufacturers, said FECI. Railway operating profit decreased $4.4 million to $14.4 million, compared to $18.8 million in the first quarter of 2006.
The more serious decline was in land sales, which decreased $43.9 million to nearly nothing at all. Flagler Development Group sold no land. Florida East Coast Railway sold buildings and land worth $460,000.
Flagler's commercial leasing brought in revenue of $26.9 million, up 18 percent from a year earlier. Realty services revenue increased from $400,000 to $19.1 million in the first quarter due to addition of recent acquisition the Codina Group. Operating profit of $13.2 million from rental and services partially offset losses in land sales.