(The following story by Mark Davis appeared on the Kansas City Star website on August 28, 2009.)
KANSAS CITY, Mo. — A stronger economy should help business at the Kansas City-based railway and that’s exactly the thought behind the stock’s 5.8 percent gain today.
Shares added $1.37, to close at $24.99, after a Morgan Keegan analyst raised his earnings estimate on the company.
“We recently had management of Kansas Southern on the road marketing and came away from the meetings with increased conviction behind the potential earnings power in the back half of the year,” analyst Art Hatfield wrote in his note.
Kansas City Southern should earn a dime more per share in the third quarter, meaning 32 cents a share instead of 22 cents a share, Hatfield wrote.
He increased his fourth quarter estimate to 35 cents from 27 cents a share.
Part of that conviction rests also on a 12 percent climb in volumes, sequentially, his note said. September 2008 also offers an easier comparison.