Friday, April 19, 2013

KCS sets record 1Q revenue; earnings beat Street

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Kansas City Southern early Friday reported first-quarter revenue of $553 million, up 1% from the comparable quarter in 2012 and a record. Net income was $94 million, or 94 cents per diluted share, up 25% compared with $75 million, or 68 cents per diluted share, in the comparable 2012 quarter, and beating Wall Street consensus estimates by three cents.

"During the first quarter of 2013, KCS experienced consistently strong revenue growth from the shipment of crude oil (+ 369%), automotive (+31%) and cross-border intermodal (+71%)," said President and CEO David L. Starling in a statement. "The positive contribution from these growth areas was partially offset by a decline in grain revenues (-38%), the result of a severe drought which impacted major sections of the U.S.'s corn crop last year. We believe that if harvest levels return to normal in the fall, the KCS grain revenues should rebound later in 2013."

"The continued growth of our energy franchise, particularly that related to the transport of crude oil into the Gulf region, along with announcements of increased automotive production in Mexico, are but a few reasons that the KCS growth story remains very much intact," Starling said. "Energy and automotive, along with cross-border intermodal, Lázaro Cárdenas expansion, and a host of other opportunities

throughout the system, position KCS very well for significant business growth over the next several years."