(Source: Kansas City Southern press release (PDF), July 20, 2018)
KANSAS CITY, Mo. — Kansas City Southern (KCS) reported record revenues of $682 million, an increase of 4% from second quarter 2017. Overall, carload volumes increased 1% compared to prior year.
Second quarter 2018 highlights:
• Record revenues of $682 million, an increase of 4% from prior year on 1% volume growth
• Record operating income of $246 million, 3% higher than prior year
• Operating ratio of 64.0%, compared to 63.5% in second quarter 2017
• Diluted earnings per share of $1.45, an increase of 14% from prior year; record adjusted diluted earnings per share of $1.54, 16% higher than a year ago
Revenues for the second quarter of 2018 increased in five commodity groups, led by a 17% increase in Automotive and a 14% increase in Chemicals and Petroleum. Intermodal and Industrial and Consumer both grew by 3%, and Agriculture and Minerals grew by 1%. These increases were partially offset by a 20% decline in Energy, driven primarily by a reduction in utility coal volume due to a Texas utility closure in January 2018.
Operating expenses in the second quarter of 2018 were $437 million, 5% higher than 2017. Operating income was a record $246 million, 3% higher than a year ago. KCS reported a second quarter operating ratio of 64.0%, 0.5 points higher than second quarter 2017.
Reported net income in the second quarter of 2018 was $149 million, or $1.45 per diluted share, compared with $135 million, or $1.27 per diluted share in the second quarter of 2017. Adjusted diluted earnings per share was a record $1.54, 16% higher than a year ago, excluding the impacts of foreign exchange, debt retirement costs and adjustments to 2017 provisional income tax benefit for the Tax Cuts and Jobs Act.
“Supported by the strength and diversity of our franchise, KCS achieved record quarterly financial results,” stated Kansas City Southern’s President and Chief Executive Officer Patrick J. Ottensmeyer. “We persevered through volume headwinds from utility coal and a challenging FX environment impacting Mexico international intermodal business, to deliver topline growth from five of six business units, record franchise cross-border revenue and record adjusted diluted earnings per share.
“As we move into the second half of 2018 and 2019, we expect volume growth to accelerate, benefiting from a strong economy, network capacity investments and commercial opportunities that are unique to the KCS franchise.”
Headquartered in Kansas City, Mo., Kansas City Southern (KCS) 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 Mexico, 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. KCS’ North American rail holdings and strategic alliances are primary components of a railway network, linking the commercial and industrial centers of the U.S., Mexico and Canada. More information about KCS can be found at www.kcsouthern.com