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By Shreyasee Raj
(Reuters) - Kansas City Southern's quarterly results missed estimates on Friday as a global chip shortage hurt automobile production and winter storms disrupted trade, hitting the U.S. railroad operator's freight volumes.
Kansas City's network is concentrated in southern United States which made it particularly vulnerable to the deep freeze that engulfed Texas and nearby regions, causing congestion on its lines.
"We continue to see lower demand for...metals used in automobile manufacturing due to the chip shortage," Kansas City Southern Head of Marketing Michael Naatz said.
"Although the semiconductor shortage remains a bit of a concern, some previously closed plants have begun to reopen."
The company, which agreed to be bought by Canadian Pacific in a $25 billion deal last month, however, reaffirmed its full-year double-digit revenue growth, citing an expected recovery in the chip shortage in the latter half of 2021.
Kansas City's carload volumes for its automotive business, which make up over 6% of its overall revenue, fell 18% in the first quarter ended March 31, dragging down overall volumes by about 1%.
The company's net income rose to $153.4 million, or $1.68 per share, in the quarter, from $152.3 million, or $1.58 per share, a year earlier.
Operating ratio, a key metric for Wall Street, rose to 64.2% from 60.5% a year earlier. A lower operating ratio signals improved profitability.
Revenue fell to $706 million from $731.7 million in the first quarter ended March 31.
Analysts on average expected the company to report a profit of $1.94 per share on revenue $710.9 million, according to IBES data from Refinitiv.
(Reporting by Shreyasee Raj in Bengaluru; Editing by Vinay Dwivedi)