(The Kansas City Star posted the following article on its website on November 1.)
KANSAS CITY — Shares of Kansas City Southern closed down more than 4 percent Tuesday, as the company reported mixed results but beat Wall Street’s earnings estimates.
Kansas City Southern reported lower earnings for its third quarter but higher revenues and higher freight volumes.
The Kansas City-based railroad company reported net income of $26.4 million, or 32 cents a share, compared with $110.5 million, or $1.14 a share, during the same period last year.
In the year-ago period, the company had recorded a $131.9 million noncash gain from a tax settlement with Mexico related to the completion of its acquisition of Mexico’s largest railroad, now called Kansas City Southern de Mexico.
Although the company beat by a dime per share Wall Street estimates of 22 cents a share, its shares closed at 28.39, down $1.19, or 4.02 percent.
The company reported revenues of $415.7 million, an 8.1 percent increase from the $384.6 million in revenues in the third quarter a year ago. The company said the gain was driven by a 1.9 percent increase in freight volumes. The company said all of its business units but automotive saw increases in volume.
Revenue per carload was up 6.3 percent as the company benefited from rising imports and increased pricing power as transportation capacity has become tighter.
“After four quarter-over-quarter volume comparisons showing an absence of unit growth, KCS recorded increased volumes in the third quarter of 2006 compared with the previous year,” Michael R. Haverty, chairman and chief executive officer, said in a statement.
The company expects a better expense ratio in the fourth quarter.