Class I railway Kansas City Southern’s (KCS) net income rose 7 percent to $129.9 million for the quarter on revenues that grew 9 percent to $656.6 million compared with the same 2016 period, according to the company’s most recent financial statements.
Kansas City Southern (KCS), a transportation holding company that owns the Kansas City Southern Railway Co., Kansas City Southern de México, S.A. de C.V., and a 50 percent interest in the Panama Canal Railway Company, saw its net earnings rise 7 percent to $129.9 million, up from $121 million the same quarter a year ago, according to the company’s most recent financial statements.
Third quarter diluted earnings per share (EPS) stood at $1.23 per share, as the Class I railroad’s revenues grew 9 percent to $656.6 million and volumes increased 3 percent to 576,400 carloads.
KCS saw revenue growth in all six business units, with primary strength in automotive, energy, and chemical & petroleum, the company said Thursday. Operating metrics showed continued improvement despite a 4 percent increase in expenses and impacts from Hurricane Harvey in the Gulf Coast region. Dwell times improved 10 percent from the same period last year to 21.6 hours, KCS noted.
Hurricane Harvey impacts resulted in an estimated loss of $0.12 to $0.14 per share with estimated incremental expenses offset in the third quarter by estimated insurance recovery, said KCS. The company also noted it expects to recognize additional insurance recoveries in 2018, when cash is received or claim is settled.
The company’s capital program includes the transition from construction to operations at the Sanchez facility while the Sasol/Lake charles Development Project for the new Sasol rail terminal remains on schedule for late 2017 construction completion, KCS noted.
KCS said it expects fourth quarter volumes to show continued strength in petroleum and strengthening in the plastics and chemical markets. Grain harvest conditions remain strong, driving demand for both domestic and cross-border shipments, while paper volumes are expected to increase due to market demand and tighter trucking capacity, said KCS.
Seasonal slowdowns in addition to hurricane production level impacts are expected to result in tough year-over-year comparisons for automotive volumes. Energy is also expected to be unfavorable, with utility coal declining and frac sand neutral, yet crude oil remaining strong, according to KCS.
KCS keeps Q3 profits chugging despite Hurricane Harvey impacts
