(Source: Kansas City Southern press release, October 16, 2015)
KANSAS CITY, Mo. — Kansas City Southern (KCS) reported third quarter 2015 revenues of $632 million, a decrease of 7% compared to third quarter 2014. Overall, carload volumes were 2% lower than in third quarter 2014. Excluding the estimated impacts of Mexican peso depreciation and lower U.S. fuel prices, revenue increased 1% compared to the third quarter of 2014.
Third Quarter 2015 Results
• Revenue of $632 million, a decrease of 7% compared to third quarter 2014.
• Operating income of $220 million, 4% lower than a year ago.
• Record third quarter operating ratio of 65.2%, compared with 66.1% in third quarter 2014.
• Diluted earnings per share of $1.20. Adjusted diluted earnings per share of $1.21 for third quarter 2015, a 6% decrease compared to third quarter 2014.
Compared to 2014, third quarter revenue included a 6% increase in Agriculture & Minerals and a 5% increase in Chemical & Petroleum. All other commodity groups were down compared to 2014.
Operating expenses in the third quarter were $412 million, 8% lower than 2014. Excluding the estimated impacts of Mexican peso depreciation and lower U.S. fuel prices, operating expenses increased 2% compared to the third quarter of 2014.
Operating income for the third quarter of 2015 was $220 million compared with $229 million a year ago. KCS reported a third quarter 2015 operating ratio of 65.2%, a 0.9 point improvement compared to third quarter 2014.
Reported net income in the third quarter of 2015 totaled $132 million, or $1.20 per diluted share, compared with $138 million, or $1.25 per diluted share, in the third quarter of 2014. Excluding the impacts of foreign exchange rate fluctuations, adjusted diluted earnings per share for third quarter 2015 was $1.21 compared to $1.29 in 2014.
“Kansas City Southern’s third quarter 2015 financial and operational statistics point to meaningful sequential improvement from the second quarter,” stated Chief Executive Officer David L. Starling. “While the Company’s third quarter revenues increased $46 million over the second quarter, operating expenses grew by only $13 million. This improved financial performance contributed to a record third quarter operating ratio of 65.2%.
“There is no question that KCS has been confronted with some challenges in 2015. The resiliency of this Company has been demonstrated by its ability to hit these challenges head-on and recover quickly while maintaining strong margins. We look to finish this year with continued strong commercial and operational improvement and ride this positive momentum into 2016.”
Headquartered in Kansas City, Mo., Kansas City Southern is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is The Kansas City Southern Railway Company, serving the central and south central U.S. Its international holdings include Kansas City Southern de México, S.A. de C.V., serving northeastern and central Mexico and the port cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. Kansas City Southern’s North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the U.S., Mexico and Canada.