But the Class I railroad maintained its full-year outlook of revenue growth in the mid-single digits, citing strength in automotive and cross-border freight volumes. Wall Street responded favorably, as shares of KCS rose on Thursday. Shares were up 2.78% at $79.53 in mid-morning trade Friday on the New York Stock Exchange.
KCS's third-quarter revenue of $577 million was a record, and up 6% from the year-ago quarter. The railroad's operating ratio of 68.7% was a 2.6 point improvement from its ratio of one year ago.
Revenue growth was led by a 31% increase in the railroad's Automotive sector and a 25% increase in Intermodal revenue. Energy-related revenue increased 8% from a year ago; while revenue KCS's Chemical & Petroleum and Industrial & Consumer segments grew by 4% and 1%, respectively, in the third quarter.
"The combination of solid top line growth and disciplined operating performance resulted in KCS delivering a third quarter operating ratio of 68.7%, the best in the Company's history," said KCS President and CEO David L. Starling.
"Revenues were primarily driven by KCS' five fastest growing categories— automotive, cross-border intermodal, container traffic through Lázaro Cárdenas, crude oil and frac sand," Starling said. "Collectively, these five categories, which represent approximately 18% of total KCS freight revenues for the third quarter, grew by 46% when compared to the third quarter 2011, and we believe that there is significant long term growth potential in each of these areas."