PWX Providence And Worcester Railroad Company

Providence and Worcester Railroad Company (NASDAQ: PWX) today reported its results for the third quarter of 2008. The Company�s net income for the quarter was $534,000 compared to net income of $181,000 in the third quarter of 2007. Diluted income per common share increased to $0.11 in the third quarter of 2008 from $0.04 in 2007. Income before income taxes in the third quarter of 2008 included $484,000 of gains realized from the sale of surplus property and equipment compared to $10,000 of such gains in 2007. Operating revenues for the third quarter of 2008 increased $840,000, or 11.5%, from the third quarter of 2007. This increase is the result of a 14.9% increase in conventional freight revenues partially offset by a 34.9% decline in container freight revenues. Increased shipments of ethanol and automobiles, two commodities which the Company began handling during the second half of 2007, as well as increased shipments of coal and steel ingots, account for the increase in conventional freight revenues. That increase was offset somewhat by decreases in shipments of construction aggregates, chemicals, building products and other commodities during the quarter, which appear to be largely attributable to the economic slow-down experienced by the United States economy. The sharp decrease in container revenue results from a continuing decline in container traffic volume which began midway through 2007. Diesel fuel expense for the quarter increased by $489,000 (72.8%) from the third quarter of 2007, primarily as a result of sharply-increased prices for petroleum products during the period. During the nine months ended September 30, 2008, the Company had a net loss of $68,000 ($0.02 per common share) compared to a net loss of $633,000 ($0.14 per common share) during the nine months ended September 30, 2007. Statement of Operations (Unaudited) (Dollars in Thousands Except Per Share Amounts) � � � � For the Three Months For the Six Months Ended September 30, Ended September 30, � 2008 � � 2007 � 2008 � � � 2007 � � Operating Revenues $ 8,136 $ 7,296 $ 22,226 $ 19,453 Other Income � 617 � 159 � 924 � � 752 � Total Revenues 8,753 7,455 23,150 20,205 Operating Expenses � 7,964 � 7,174 � 23,253 � � 21,168 � Income (Loss) before Income Taxes 789 281 (103 ) (963 ) Provision for Income Taxes (Benefit) � 255 � 100 � (35 ) � (330 ) Net Income (Loss) $ 534 $ 181 $ (68 ) $ (633 ) Weighted Average Number of Shares Outstanding, Diluted 4,882,183 4,627,929 4,787,033 4,543,292 Diluted Income (Loss) Per Share $ .11 $ .04 $ (.02 ) $ (.14 ) This release contains �forward-looking statements� within the meaning of section 21E of the Securities and Exchange Act of 1934, as amended. These forward-looking statements represent the Company�s present expectations or beliefs concerning future events. The Company cautions that such statements are necessarily based on certain assumptions which are subject to risks and uncertainties, including, but not limited to, changes in general economic condition, and changing competition which could cause actual results to differ materially from those indicated herein. Further information on these risk factors is included in the Company�s filings with the Securities and Exchange Commission.