(Source: Kansas City Southern press release (PDF), April 19, 2013)
Kansas City, MO, April 19, 2013. Kansas City Southern (KCS) reported first quarter 2013 revenues of $553 million. Overall, carload volumes were 2% higher than in first quarter 2012.
First Quarter 2013 Highlights:
· Revenues of $553 million, an increase of 1% over first quarter 2012 on a 2% increase in carloads.
· Operating income of $163 million, 3% higher than a year ago.
· Operating ratio of 70.5%, a 0.7 point improvement over first quarter 2012.
· Diluted earnings per share of $0.94 compared with diluted earnings per share of $0.68 in first quarter 2012. Adjusted diluted earnings per share of $0.89 for first quarter 2013, compared with adjusted diluted earnings per share of $0.80 in the first quarter 2012.
First quarter revenue growth compared to 2012 was led by a 31% increase in Automotive and a 17% increase in Intermodal revenues. Revenues from Energy and Industrial and Consumer Products also grew by 7% and 4%, respectively, over 2012. Chemical & Petroleum revenue was flat compared to first quarter 2012. Agriculture and Minerals revenues declined by 28%, primarily due to a decrease in grain volumes resulting from severe drought conditions experienced in the Midwestern region of the United States during 2012.
Operating income for the first quarter of 2013 was $163 million compared with $158 million a year ago, a 3% increase. Operating expenses in the first quarter were $390 million, flat compared to the corresponding 2012 period. KCS reported a first quarter 2013 operating ratio of 70.5%, a 0.7 point improvement from first quarter 2012.
Reported net income in the first quarter of 2013 totaled $104 million, or $0.94 per diluted share, compared with $75 million, or $0.68 per diluted share, in the first quarter of 2012. Excluding the impacts of foreign exchange rate fluctuations and the first quarter of 2012 debt retirement costs, adjusted diluted earnings per share for first quarter 2013 was $0.89 compared with $0.80 in the first quarter of 2012.
“During the first quarter of 2013, KCS experienced consistently strong revenue growth from the shipment of crude oil (+ 369%), automotive (+31%) and cross-border intermodal (+71%),” stated President and Chief Executive Officer David L. Starling. “The positive contribution from these growth areas was partially offset by a decline in grain revenues (-38%), the result of a severe drought which impacted major sections of the U.S.’s corn crop last year. We believe that if harvest levels return to normal in the fall, the KCS grain revenues should rebound later in 2013.
“KCS again demonstrated its ability to react quickly to sudden market changes and manage its business accordingly. Despite the drought’s impact on our grain business, our efficient use of equipment and human capital contributed to a 70.5% operating ratio, a 0.7 point year-over-year improvement.
“The continued growth of our energy franchise, particularly that related to the transport of crude oil into the Gulf region, along with announcements of increased automotive production in Mexico, are but a few reasons that the KCS growth story remains very much intact. Energy and automotive, along with cross-border intermodal, Lázaro Cárdenas expansion and a host of other opportunities throughout the system, position KCS very well for significant business growth over the next several years.
“In addition, KCS’ subsidiary, Kansas City Southern de México, S.A. de C.V., has indicated its intention to access the debt market in connection with the tender offers and consent solicitations announced last week. Having achieved investment grade ratings from the three major rating agencies, and with investment grade corporate borrowing costs remaining near all-time lows, KCS believes that it has an attractive opportunity to further reduce interest costs and lengthen the maturity of its debt portfolio.
“With the winter and first quarter behind us, we at KCS remain optimistic that our abundance of expanded and new business opportunities places us in a good position for growth during the remainder of 2013 and beyond.”