(The following story by Greg Hack appeared on The Kansas City Star website on July 27, 2010.)
KANSAS CITY, Mo. — Kansas City Southern earnings jumped five-fold from a year ago and revenue was up 35 percent in the second quarter as the company recovered from the worst freight recession since the 1930s.
The company on Tuesday reported net income of $34.6 million, after paying dividends to preferred shareholders, up from $6.5 million a year ago. This worked out to diluted earnings per share of 34 cents, versus 7 cents a year ago.
The company also continued to pay off debt and improve its overall financial position. The company said it would have earned 55 cents a share after adjusting for 21 cents a share in debt retirement costs.
Total revenue was $461.6 million, compared with $341.3 million a year ago. Revenue was up in every sector, with increases ranging from 18 percent for chemical and petroleum shipments to 292 percent for automotive shipments. In between were coal (up 25 percent), industrial and consumer products (up 31 percent), agriculture and minerals (up 42 percent) and intermodal (up 54 percent).
The company also said shipping volumes were back to where they were two years ago, before the recession.
The results topped analysts’ expectations, but the company’s stock fell 5.8 percent, $2.30 a share, and closed at $37.15. The stock had risen $5 a share in the past week in anticipation of the good earnings.
Company officials said in a conference call that they expected to lose revenue in the current quarter because of flood damage after Hurricane Alex and that they expected “slow, steady” growth in the second half after the rapid advance in the second quarter.
The officials said insurance should cover most of the damages from the hurricane. Kansas City Southern reopened a key bridge between Laredo and Monterrey over the weekend.