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Rail News Home Kansas City Southern


Rail News: Kansas City Southern

KCS sets revenue and volume records, lowers operating ratio


Despite headwinds that included flood-disrupted grain and coal traffic and high fuel costs, Kansas City Southern registered record financial results in the second quarter.

The 2Q records include total revenue, which climbed 16 percent to $535 million; freight revenue, which rose 16 percent to $518 million; and volume, which increased 7 percent to 499,800 units compared with second-quarter 2010 results. In addition, average revenue per unit rose 9 percent to $1,036 — the highest in KCS’ history.

The Class I’s financial report also shows adjusted diluted earnings per share jumped 29 percent to 71 cents, diluted earnings per share ballooned 88 percent to 64 cents, operating income climbed 19 percent to $152 million and the operating ratio improved 0.7 points to 71.7. Analysts polled by Thomson Reuters had projected earnings of 70 cents per share and revenue of $524.9 million.

“Kansas City Southern achieved year-over-year and sequential improvement in most of its key financial and operational metrics, including carloads, revenues, operating income and operating ratio,” said KCS President and Chief Executive Officer David Starling in a prepared statement. “These results illustrate the continued expansion of KCS’ markets and its success in maintaining a high level of operating performance while handling record levels of traffic.”

All commodity groups registered revenue gains:
• automotive revenue soared 42 percent to $34.4 million and volume jumped 17 percent to 20,500 units;
• coal revenue ballooned 28 percent to $68 million and volume increased 5 percent to 68,300 units;
• intermodal revenue climbed 25 percent to $62 million and volume rose 13 percent to 194,600 units;
• industrial and consumer products revenue went up 14 percent to $125 million and volume inched up 3 percent to 80,600 units;
• chemical and petroleum revenue also increased 14 percent to $106.9 million and volume rose 4 percent to 67,000 units; and
• agriculture and minerals revenue increased 5 percent to $121.5 million, but volume fell 4 percent to 68,800 units.

However, operating expenses rose 15 percent year over year to $383 million, primarily because fuel costs shot up 33 percent to $92 million. Excluding the high fuel costs, expenses would have risen 10 percent, KCS officials said.

Contact Progressive Railroading editorial staff.

More News from 7/22/2011