Kansas City Southern’s 3rd quarter profit down 72%
Kansas City Southern reported third quarter net income of $31.3 million, down 72.2 percent from $112.7 million in the same quarter 2005.
The third quarter 2005 result included a one-time gain of about $132 million following settlement of a VAT dispute with the Mexican Government.
In the latest quarter, KCS’s operating income was $77.3 million, from a loss of $1.9 million a year ago. Revenue improved 8.1 percent to $415.7 million from $384.6 million with all of KCS’s business units recording strong gains except automotive (down 18.3 percent). Intermodal revenue was up 24.8 percent, paper and forest products improved 10.3 percent, and agricultural and minerals was up 10 percent.
KCS said its quarterly traffic volumes improved 1.9 percent to 483,369 car loadings.
“Volume growth improving overall operations and our continued progress in containing costs, were major contributors to KCS having a positive third quarter,” said Michael R. Haverty, chairman and chief executive officer.
“After four quarter-over-quarter volume comparisons showing an absence of unit growth, KCS recorded increased volumes in the third quarter of 2006 compared with the previous year, even after accounting for the hurricanes that hit our rail system in 2005. This suggests that the majority of our business rationalization is behind us and much of our lower margin business has been replaced with more profitable traffic,” Haverty said.
For the year to date, KCS posted net income of $68.3 million, down 28.6 percent from $95.7 million after nine months last year. Operating income soared to $216.1 million, from $14.5 million. KCS’s revenues increased 26.3 percent to $1.2 billion from $963.9 million.