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Rail News: Kansas City Southern

KCS posts lower revenue in Q1, names Songer and Orr EVPs


Kansas City Southern last week reported first-quarter 2021 revenue of $706 million, down 4% from the same period a year ago.

Overall, carload volumes were down 1% compared with volumes in Q1 2020, KCS officials said in a press release.

The decline in revenue was attributed mainly to lower volumes, lower fuel surcharge and fluctuations in foreign currency.

Q1 operating expenses were $453 million. Operating income totaled $253 million and net income totaled $153.4 million, or $1.68 per diluted share. Adjusted Q1 operating income, net income and diluted earnings per share were $272.3 million, $174.6 million and $1.91, respectively.

KCS reported an operating ratio of 64.2% and an adjusted operating ratio of 61.4%.

"Although our first quarter performance was impacted by several unique and challenging events, including the Polar Vortex, and lingering network congestion, our operating team is focused on improving operating metrics and customer service through [precision scheduled railroading] phase III,” said President and Chief Executive Officer Patrick Ottensmeyer in a press release. “Based on an outlook for improvement in volume growth and operational trends, we can confidently confirm our 2021 guidance."

Also during Q1, KCS announced it would be acquired by and combined with Canadian Pacific.

"This combination is expected to provide an enhanced competitive alternative to existing rail service providers, resulting in improved service to customers of all sizes," Ottensmeyer said.

Meanwhile, KCS announced that Jeffrey Songer has been named to a new position as executive vice president of strategic merger planning and John Orr has been named EVP of operations.

In this new role, Songer will primarily focus on managing the merger application process for the proposed Canadian Pacific and KCS combination. The process will include developing, among other things a joint network-wide operating plan, safety integration plan, environmental impact statement and environmental assessment and labor impact plan.

"Jeff is uniquely qualified to fill this critical role in what is arguably the most strategically significant project in our company’s 134-year history," said Ottensmeyer. "His 16-year track record of outstanding performance at KCS, and his familiarity with all aspects of our network, business and customer base, make him very well suited for this important role."

Orr brings more than 20 years of precision scheduled railroading (PSR) operations experience at CN, serving most recently as senior VP and chief transportation officer, where he was responsible for CN’s transportation and network assets across the United States and Canada.

"John has been with us as an executive consultant since February and has gained a solid understanding of our network operations and opportunities for further improvement. John has integrated extremely well with Sameh Fahmy and the entire PSR implementation team at KCS, and I am confident he will contribute positively to our service focused ‘phase three’ PSR initiatives."

Contact Progressive Railroading editorial staff.

More News from 4/19/2021