(Source: Kansas City Southern press release, October 17, 2014)
KANSAS CITY, Mo. — Kansas City Southern (KCS) (NYSE:KSU) reported third quarter 2014 revenues of $678 million. Overall, carload volumes were 4% higher than in third quarter 2013.
Third quarter revenue growth compared to 2013 was led by a 28% increase in Automotive and a 13% increase in Industrial & Consumer Products. Intermodal and Agriculture & Minerals were also strong, growing by 11% and 8%, respectively. Chemical & Petroleum revenue grew by 7%. Energy revenue declined by 4%, primarily due to a decline in utility coal and frac sand shipments.
Highlights:
• Record revenues of $678 million, an increase of 9% over third quarter 2013 on a 4% increase in carloads.
• Operating income of $229 million, 15% higher than operating income in the third quarter of 2013.
• Operating ratio of 66.1%, a 1.7 point improvement over third quarter 2013.
• Diluted earnings per share of $1.25. Adjusted diluted earnings per share of $1.29 for third quarter 2014, a 17% increase over third quarter 2013.
Operating expenses in the third quarter were $448 million, 6% higher than 2013 operating expenses. Operating income for the third quarter of 2014 was $229 million compared with $200 million a year ago, a 15% increase. KCS achieved a third quarter 2014 operating ratio of 66.1%, a 1.7 point improvement from third quarter 2013.
Reported net income in the third quarter of 2014 totaled $138 million, or $1.25 per diluted share, compared with $119 million, or $1.07 per diluted share, in the third quarter of 2013. Excluding the impacts of foreign exchange rate fluctuations and debt retirement costs, adjusted diluted earnings per share for third quarter 2014 was $1.29, compared with $1.10 in the third quarter of 2013, a 17% increase.
“KCS achieved record quarterly financial results as a result of the continued strength and diversity of our franchise,” stated Kansas City Southern’s President and Chief Executive Officer David L. Starling. “An operating ratio of 66.1% was attained primarily due to volume growth, especially in the automotive and grain commodity groups, as well as system efficiency and cost controls.
“We are optimistic about the remainder of the year and reaffirm our updated 2014 goals outlined to investors in September. Looking ahead, we expect KCS’ long-term growth to be fueled by system-wide opportunities, which position KCS very well over the next several years.”