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Kansas City Southern (KSU) Q1 Earnings In Line, Sales Beat


Railroad operator Kansas CitySouthern KSU reported mixed results in the first quarter of 2017. Earnings were in line with the Zacks Consensus Estimate, while revenues beat the same. The company’s earnings (on an adjusted basis) of $1.17 per share improved 13.6% on a year-over-year basis.

Kansas City Southern reported revenues of $609.5 million, which beat the Zacks Consensus Estimate of $604.7 million. Revenues improved 8.3% on a year-over-year basis. Moreover, excluding the estimated impact of the depreciation of the Mexican peso, revenues improved 11%.

The results were aided by a 6% rise in overall carload volumes. The earnings report found favor with investors. Consequently, shares of the company rose in pre-market trading.

In the reported quarter, operating income increased 12% to $211 million. Kansas CitySouthern reported operating ratio of 65.4% in the reported quarter, reflecting an improvement of 120 basis points on a year-over-year basis.

Segment Results

The Chemical & Petroleum segment generated revenues of $126.5 million, up 8% year over year. Volumes improved 4% year over year. Revenues per carload also improved 4% from the prior-year quarter.

The Industrial & Consumer Products generated revenues of $140.1 million, down 1% year over year. Business volumes decreased 1%, whereas revenues per carload were flat year over year.

The Agriculture & Minerals segment revenues totaled $116.3 million, up 6% year over year. While business volumes climbed 2%, revenues per carload were up 4%, both on a year-over-year basis.

The Energy segment generated revenues of $69 million, up 64% year over year. Impressive performance of Utility Coal boosted the segment’s results. Business volumes improved 30% year over year, while revenues per carload grew 26%.

Intermodal revenues were $83.5 million, down 2% year over year. However, business volumes and revenues per carload dropped 1% each.

The Automotive segment accounted for $51.3 million of the total revenue, up 25% year over year. Business volumes improved 38%, whereas revenues per carload dropped 9%.

Other revenues totaled $22.8 million, down 12% year over year.

Kansas City Southern currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Investors interested in the broader transportation space are also keenly waiting for first-quarter earnings reports from key players like Union Pacific Corporation UNP, American Airlines Group AAL and Canadian National Railway Company CNI, in the coming days. American Airlines and Union Pacific are scheduled to report on Apr 27, while Canadian National will report on Apr 24.

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