Treated-wood producer Stella-Jones expects more demand for its railway ties in new tracks and upgrades as the economy improves, The Canadian Press reports. Sales of railway ties at Stella-Jones increased 91 per cent in its third quarter to C$84.3 million, chief executive Brian McManus said.

"These results reflect what we see as a growing confidence among railroad operators and the gradual strengthening of the economy," McManus said, after the company reported its third-quarter profit increased by 54 per cent to C$12.2 million.

The number of carloads and intermodal containers hauled on North American railroads was up between 10 and 15 per cent in the first nine months of this year, he told analysts on a conference call to discuss the quarterly results.

"This greater activity should lead to increased investments in both new track and track upgrades," McManus said. "Industry demand for railway ties has also accelerated in recent months and our enhanced market penetration positions Stella-Jones to benefit from any business opportunity that may arise."

The acquisition of U.S.-based Tangent Rail Corp., effective last April 1, contributed sales of approximately C$41.2 million, the Montreal company said. The integration of Tangent is still a focus for Stella-Jones, McManus said. Stella-Jones bought Tangent for US$165 million to expand its capabilities within the U.S. railway tie market and provide it with operations for wood treatment.

Tangent produces treated wood products, primarily railway ties, with plants in Warrior, Ala.; Terre Haute and Winslow in Indiana; Alexandria, La. and McAlisterville, Pa.

In its financial results, Stella-Jones said its earnings per share in the quarter were equal to 77 cents per share. That compared to a profit of C$8.3 million or 65 cents a share in the same quarter last year. Overall sales rose to $161.3 million from C$104.7 million.

Looking ahead, McManus said there's growing demand for Stella-Jones products.

"In brief, we are optimistic for the coming quarters."

Stella-Jones produces a variety of treated-lumber products that also include wood poles for the electrical utility industry and consumer lumber products.

McManus said consumer lumber sales were down more than 15 per cent to $9.5 million due to "unfavorable" Canadian weather and the expiration of the federal home renovation tax credits.