(The following story by Randolph Heaster appeared on The Kansas City Star website on February 5.)
KANSAS CITY — Kansas City Southern posted another strong quarter with sharp earnings and revenue gains in 2007’s final three months.
For the three months ended Dec. 31, Kansas City Southern earned $54.7 million, or 56 cents a share, on $460.3 million in revenues. That was up from the same period in 2006, when profits reached $40.6 million, or 41 cents a share, on $442.4 million in sales.
Kansas City Southern said Tuesday that revenues were up despite an overall drop in carload volumes due to a strong pricing competition. However, certain areas saw volume increases that led to higher revenues, such as the petroleum and chemical business, the company said in its earnings announcement released before the financial markets opened.
In addition, volumes were higher in Kansas City Southern’s rail-truck business in Mexico.
Kansas City Southern also exceeded analyst expectations, who on average were expecting earnings of 46 cents a share for the quarter.
Kansas City Southern’s goal for 2008 is to be North America’s fastest-growing railroad, said Michael R. Haverty, the company’s chairman and chief executive.
“While the uncertain economy will provide a challenge, KCS is confident that new business coming on-line both in the U.S. and Mexico, and continued strong pricing, will allow for volume growth in most commodity areas and revenue-growth across the board,” Haverty said in a statement.
For the year, earnings were up sharply at $153.8 million, or $1.57 a share, on $1.74 billion in revenue.