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Kansas City Southern April 25 reported $11.7 million in first-quarter net income, double its $5.9 million net income in first-quarter 2001 because of a $8.8 million decline in operating expenses, a $3.9 decrease in interest expense, a $3.4 million increase in other income and a $4.4 million gain from the sale of Mexrail Inc. to KCS affiliate TFM S.A. de C.V.
Meanwhile, quarterly domestic operating income of $13.4 million more than doubled last year's $6.1 million.
KCS also improved its quarterly operating ratio to 87.2 from 94 in 2001's first quarter.
However, the railroad's total quarterly revenue of $142.5 million declined compared with $144 million last year.
"We believe the recently announced marketing agreement with Burlington Northern Santa Fe will provide important opportunities to grow our revenue base, particularly in the chemical, grain and forest product markets," said Mike Haverty, KCS chairman, president and chief executive officer, in a prepared statement. "We [also] believe that the Mexrail transaction will help promote better operational efficiency and provide more synergistic opportunities for the NAFTA rail network."
And KCS and Grupo TMM plan in the second quarter to purchase the Mexican government's 24.6 percent ownership in TFM, says Haverty, adding that the companies' purchase option expires July 31.