Kansas City Southern (KSU 110.20, +6.06, +5.82%) is
trading higher after reporting better than expected earnings for the fourth
The rail carrier reported above-consensus fourth quarter earnings of $1.56 per share on a 5.1% yr/yr increase in revenue to $694 mln, which was just ahead of expectations.
President and Chief Executive Officer Patrick Ottensmeyer said that while the railroad achieved record revenue, adjusted operating income, and adjusted earnings per share, the full-year performance fell short of the company's internal expectations. Mr. Ottensmeyer added that the company will implement principles of the Precision Scheduled Railroading methodology, which should improve asset utilization, efficiency, and customer satisfaction.
The company issued in-line revenue guidance for fiscal 2019, expecting sales between $2.85 bln and $2.90 bln. Volume growth is expected between 3.0% and 4.0%. Adjusted operating ratio increased to 64.3% from 64.0% one year ago.
Looking at the segment breakdown, Chemical & Petroleum revenue grew 19.1% yr/yr to $164.00 mln. The increase was driven by a 44.7% yr/yr spike in Petroleum revenue, which jumped to $70.60 mln. Carloads and Units increased 16.0% yr/yr to 78,500, largely due to a 43.3% yr/yr spike in Petroleum carloads (to 35,400). Revenue per Carload/Unit grew 2.7% to $2,089.
Industrial & Consumer Products revenue fell 5.2% to $139.50 mln. The decline was fueled by a 14.4% drop in Other revenue to $24.40 mln. Carloads and Units decreased 8.9% to 76,600 from 84,100. Revenue per Carload/Unit grew 4.1% to $1,821.
Agriculture & Minerals revenue grew 8.2% to $131.70 mln as growth in Stone, Clay & Glass revenue (+20.0% to $7.80 mln) and Grain revenue (+15.0% to $80.80 mln) outweighed declines in Food Products revenue (-4.0% to $38.30 mln) and Ores & Minerals revenue (-4.0% to $4.80 mln). Carloads and Units increased 3.0% to 62,500 while Revenue per Carload/Unit grew 9.4% to $2,107.
Energy revenue decreased 6.9% to $65.30 mln, driven by a 25.5% decline in Utility Coal revenue (to $28.70 mln). Crude oil revenue jumped 135.4% to $18.60 mln. Carloads and Units decreased 14.0% to 63,400 while Revenue per Carload/Unit increased 8.8% to $1,030.
Intermodal revenue grew 0.8% to $98.20 mln while Carloads and
Units increased 3.8% to 268,300. Revenue per Carload/Unit decreased 2.9% to
Automotive revenue decreased 1.2% to $59.90 mln while Carloads and Units decreased 4.9% to 38,900. Revenue per Carload/Unit grew 3.9% to $1,540.