(The Kansas City Star posted the following article by Randolph Heaster on its website on February 3.)
KANSAS CITY — The lingering effects of two Gulf Coast hurricanes resulted in a bigger loss for Kansas City Southern in the fourth quarter of 2005.
For the three months that ended Dec. 31, the railroad company lost $4.1 million, or 5 cents a share, on $388.2 million in revenue. For the same period in 2004, it lost $1.4 million, or 2 cents a share, on $174.6 million in revenue.
The last quarter’s figures include the results of Kansas City Southern de Mexico, previously called TFM. Kansas City Southern took full ownership of Kansas City Southern de Mexico, Mexico’s biggest railroad, in September.
For all of 2005, the effects of Hurricanes Katrina and Rita reduced operating income $24.8 million, the company said.
Michael R. Haverty, Kansas City Southern’s chairman and chief executive, said that hurricane damage to the railroad was minimal but that service was disrupted to many Gulf Coast customers, particularly chemical plants in Louisiana.
Despite the problems, Kansas City Southern Railway, the main U.S. unit of the company, saw fourth-quarter revenue growth of 8 percent, Haverty said. Four of five commodity groups hauled by the railroad had quarter-over-quarter gains.
Kansas City Southern de Mexico posted 4.8 percent higher sales in the fourth quarter over the same period in 2004, Haverty said.
For 2005, Kansas City Southern earned $84.9 million, or $1.03 a share, on $1.35 billion in revenue. In 2004, the company earned $15.7 million, or 25 cents a share, on $639.5 million in revenue.
Haverty said that, excluding fuel surcharges, he expected Kansas City Southern’s revenue to grow between 5 percent and 6 percent in 2006.
Kansas City Southern shares closed Thursday at $24.60, down 79 cents.