KANSAS CITY, Missouri — Railway operator Kansas City Southern Industries Inc. (NYSE:KSU – news) said on Thursday that fourth-quarter profits more than doubled, helped by a surge in domestic coal shipments, a wire service reports.
The company, which controls five railroads in North America, also warned that it may have to take a fourth-quarter charge of $6.7 million, or 11 cents a share, for a dividend dispute involving Mexico’s Grupo Transportacion Ferroviaria Mexicana S.A. de C.V.
As previously announced, Kansas City’s Mexican subsidiary, NAFTA Rail, has filed a lawsuit in Mexico challenging a Grupo TFM resolution that authorizes a dividend payment. Kansas City has an equity investment in Grupo TFM.
The company’s shares rose 1 cent to $13.91 in early trading on the New York Stock Exchange. The stock is up about 30 percent over the last 12 months while the Dow Jones U.S. Total Market Index has fallen about 14 percent.
The railroad operator reported net income of $11.1 million, or 18 cents share, compared with $3.6 million, or 6 cents, a year earlier.
Wall Street had expected Kansas City to earn between 13 cents and 18 cents a share, with a mean forecast of 15 cents, according to market tracker Thomson Financial/First Call.
Revenues increased 8 percent, to $145.5 million from $134.8 million.
Kansas City Southern said its net tons of coal shipped increased about 35 percent from third-quarter levels because of strong demand from utility plants.
It also said shipments rose for paper products, export grain, certain chemical and plastics products and military shipments. These were partially offset by declines for domestic grain, food products, ore and mineral products, steel and scrap metal shipments and intermodal products, mostly due to the slow economy.
Kansas City said it expects coal revenues to decline in 2002 as the result of a contractual rate reduction at one customer and the expiration of another contract.
“We believe, however, that this decline in coal revenues will be offset by higher revenues for KCSR’s other commodity groups through new business and target rate increases,” the company said in a statement.
Kansas City said its equity earnings from Grupo TFM tentatively increased $2.2 million and interest expense declined $1.7 million. It said those improvements were partly offset by a $9.8 million increase in the income tax provision.