Economy expected to be volatile for rest of year
(The following story by The Associated Press appeared on the Bloomberg Businessweek website on July 29, 2010.)
Kansas City Southern reported Tuesday that its second-quarter profit rose sharply as freight shipments jumped from its lowest levels since the Great Depression.
The railroad operator said it earned $34.6 million, or 34 cents per share, for the quarter that ended June 30. That’s up from $6.5 million, or 7 cents per share, a year earlier. Adjusted for debt retirement costs, the company earned 55 cents per share in the most recent quarter.
Revenue rose 35 percent to $461.6 million.
The company said revenue growth was strong across the board when compared with the prior year’s quarter, which was its weakest period during the economic downturn. The company also benefited from better pricing and margins during the quarter.
Analysts surveyed by Thomson Reuters expected the company to earn 46 cents per share on revenue of $454.4 million. The results typically exclude one-time items.
The company also raised approximately $215 million from an equity offering during the quarter and, along existing cash on our balance sheet, plans to reduce our debt levels by $300 million. It retired approximately $237 million of this debt during the second quarter and plans to handle the remainder during the third quarter.
Shares of the company fell $2.30 to close at $37.15 following a several day rally. Shares were unchanged in after-hours trading.