Today, Kansas City Southern reported record fourth-quarter 2013 revenue of $616 million, up 8 percent compared with fourth-quarter 2012's total.
The gain primarily was driven by a 30 percent jump in agriculture and minerals revenue to $119.1 million and 18 percent climb in intermodal revenue to $94.4 million, KCS officials said in a press release. In addition, industrial and consumer products revenue increased 9 percent to $149.5 million, automotive revenue rose 9 percent to $53.5 million, chemical and petroleum revenue ratcheted up 2 percent to $105.8 million, and energy revenue fell 17 percent to $70.4 million.
KCS also reported fourth-quarter operating income of $196 million, up 13 percent; net income of $114 million, or $1.03 per diluted share, up 12 percent; volume of 543,600 units, up 2 percent; and an operating ratio of 68.1, down 1.4 points compared with fourth-quarter 2012 results. Operating expenses rose 6 percent to $420 million primarily because of higher compensation/benefits, purchased services and fuel costs.
For the full year, KCS set an annual revenue record at $2.4 billion, up 6 percent compared with 2012. Annual volume rose 2 percent to 2.2 million units, operating income climbed 10 percent to $739 million, adjusted earnings per share jumped 12 percent to $3.98, the operating ratio improved 1.1 points to an all-time best 68.8 and operating expenses increased 7 percent to $1.6 billion.
"While some shifts in market conditions impacted volumes in our agriculture & minerals and energy commodity groups, 2013 marks the fourth consecutive year KCS has recorded a double-digit percentage increase in its adjusted diluted earnings per share," said President and Chief Executive Officer David Starling.
KCS executives expect to maintain the railroad's revenue- and income-growth momentum in 2014 and beyond.
"As 2014 evolves, investors can expect to see positive developments in a wide range of commodity groups, including intermodal, automotive, steel, and chemical and petroleum products," said Starling. "Particularly exciting is that growth in these areas, as well as the increase of crude oil traffic originating in Canada and terminating at various Gulf locations, should continue to ramp up over the next five years."
KCS execs also announced today that 2014 capital investments likely will total the low 20-percent range as a percentage of total annual revenue compared with 25 percent in 2013. Roadway capital/maintenance projects are budgeted at 11 percent of total annual revenue compared with 13 percent in 2013.
This year, the Class I plans to enhance capacity along its cross-border corridor and in the Sanchez-Nuevo Laredo area of Mexico, upgrade intermodal facilities in the United States and Mexico, bolster infrastructure to support developing energy opportunities and acquire/improve rolling stock.
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