(The following report by Mark Davis appeared on The Kansas City Star website on July 10.)
KANSAS CITY — Lighter rail traffic volumes in the second quarter led an industry analyst to cut his earnings estimates for Kansas City Southern this morning.
Art W. Hatfield, who follows the rail industry for Morgan Keegan & Co. Inc., trimmed his estimate of Kansas City Southern earnings by 2 cents a share. The trim dropped his second-quarter estimate to 36 cents a share and his 2007 estimate to $1.37 a share.
Hatfield maintained his “outperform” rating on Kansas City Southern shares.
The weaker second quarter traffic numbers hit industry wide and likely reflected a softer economy, Kansas City Southern spokesman Bill Galligan said.
Galligan declined to comment on Hatfield’s estimate changes but said the company expects a stronger second half of 2007. Kansas City Southern will report second-quarter results before the stock market opens July 26.
Hatfield made similar cuts in second-quarter earnings estimates of other major rail carriers: Burlington Northern Santa Fe Corp., CSX Corp., Norfolk Southern Corp. and Union Pacific Corp.
Shares of Kansas City Southern were nonetheless up 13 cents at $38.94 in morning trading on the New York Stock Exchange.