Kansas City Southern Q1 Results Top Estimates

(RTTNews) - Transportation holding company Kansas City Southern (KSU) reported Wednesday a profit for the first quarter that decreased from last year, despite revenue growth across all operational divisions, hurt by debt retirement costs, foreign exchange rate fluctuations and lease termination costs. However, both adjusted earnings per share and quarterly revenues topped analysts' expectations.

"We are pleased with how our company performed during the first quarter All six commodity groups reported year-over-year revenue gains led by Agriculture & Minerals, which increased 40% over the prior year," President and CEO David Starling said in a statement.

The Kansas City, Missouri-based company reported net income of $94 million or $0.85 per share for the first quarter, lower than $104 million or $0.94 per share in the prior-year quarter.

Excluding debt retirement costs, foreign exchange rate fluctuations and lease termination costs, adjusted earnings for the quarter was $1.05 per share, compared to last year's $0.89 per share.

On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.99 per share for the quarter. Analysts' estimate typically excludes special items.

Revenues for the quarter grew 10 percent to a record of $607.4 million from $552.8 million in the same quarter last year, and topped fourteen Wall Street analysts' consensus estimate of $598.80 million.

The company attributed the revenue growth primarily to a 34 percent growth in agriculture & minerals revenue, a 10 percent increase in intermodal revenue, and a 7 percent rise in automotive revenues.

Further, revenues from industrial & consumer, as well as chemicals & petroleum, each grew by 3 percent. Energy revenues also increased 2 percent from last year.

Carload volumes for the quarter increased 4 percent to 535.3 thousand, and revenue per carload grew 6 percent to $1,095 from the year-ago quarter.

Operating ratio for the quarter was 73.7 percent, a 3.2 points decline over 70.5 percent in the year-ago quarter. However, excluding lease termination costs, adjusted operating ratio of 68.7 percent improved 1.8 point from last year.

"While it is still early in the second quarter, KCS business levels have improved in April. The indication that our core business appears to be gaining strength provides us with positive momentum towards achieving the 2014 goals we outlined to investors in January," Starling added.

KSU closed Wednesday's regular trading session at $101.44, up $2.28 or 2.30% on a volume of 1.24 million shares.