KSU Beats on Bottom Line

Zacks

Kansas City Southern (KSU) reported first-quarter 2013 adjusted earnings of 89 cents per share, beating the Zacks Consensus Estimate of 87 cents per share. Adjusted earnings increased 11% from 80 cents in the year-ago quarter, driven by higher freight rates.

Adjusted earnings for the first quarter excluded the impact of 5 cents per share of unfavorable special items related to income tax, adjustment for debt retirement costs and foreign exchange.

Quarterly revenues were $552.8 million, up 1.0% year over year but below the Zacks Consensus Estimate of $576.0 million. The year-over-year increase was primarily attributed to 2% growth in carloads.

In the first quarter, operating income was $162.9 million, up 3% year over year. This resulted in an operating ratio of 70.5%, down 70 basis points year over year.

Segment Wise Quarterly Results

Chemical & Petroleum segment contributed $102.4 million in revenues, up 0.5% year over year. Volume was 59,500, down 3% year over year. Revenue per unit came in at $1,721, up 4% year over year.

Industrial & Consumer Products generated revenues of $144.2 million, up 4% year over year. Business volume was 85,300, up 0.24% year over year. Revenue per carload was $1,691, up 4% year over year.

Agriculture & Minerals segment revenues were $81.0 million, down 28% year over year. Business volume was 46,400, down 24% year over year. Revenue per carload was $1,746, down 5% year over year.

Energy generated $76.3 million in revenues, up 7% year over year. Business volume was 71,000, up 2% year over year. Revenue per carload was $1,075, up 5% year over year.

Intermodal segment revenues were $79.8 million, up 17% year over year. Business volume was 227,100, up 9% year over year. Revenue per carload was $351, up 7% year over year.

Automotive segment accounted for $49.1 million revenues, up 31% year over year. Business volume was 27,100, up 18% year over year. Revenue per carload was $1,812, up 11% year over year.

Quarterly, Other revenues were $20.0 million, up 8% year over year.

Liquidity Position

The company exited first-quarter 2013 with cash and cash equivalents of $63.7 million compared with $72.6 million at the end of 2012. Long-term debt at the end of first-quarter 2013 decreased to $1,431.1 million from $1,547.6 million at the end of 2012.

The company had free cash flows of $2.8 million at the end of first-quarter 2013 compared with $38.3 million in the year ago quarter.  Capital expenditure for the quarter amounted to $112.7 million compared with $99.4 million in the year-ago quarter.

Currently, KSU carries a Zacks Rank #3 (Hold).

Upcoming Earning Releases

Other companies belonging to the Railroad Industry that are set to release financial results areCanadian Pacific Railway Limited (CP), Canadian National Railway Company (CNI) and Norfolk Southern Corp. (NSC). Canadian Pacific, which currently carries a Zacks Rank #2 (Buy), will release its earnings on Apr 24. Canadian National and Norfolk Southern, which carry a Zacks Rank #3 (Hold), will report on Apr 22 and 23, respectively.

Read the Full Research Report on KSU

Read the Full Research Report on CNI

Read the Full Research Report on NSC

Read the Full Research Report on CP

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