Kansas City Southern (KSU) Q4 Earnings Top, Volumes Rise

Kansas City Southern’s (NYSE:KSU) fourth-quarter 2017 earnings (excluding $3.95 from non-recurring items) of $1.38 surpassed the Zacks Consensus Estimate of $1.36 per share. The bottom line also improved 23.2% on a year-over-year basis. Results were driven by a 5% rise in overall carload volumes.

The company reported revenues of $660.4 million, which marginally missed the Zacks Consensus Estimate of $660.6 million. However, the top line improved 10.3% on a year-over-year basis. Revenue growth was witnessed across most of the company’s key segments.

Also, operating income increased 13% (on a reported basis) to $238 million. Kansas City Southern’s operating ratio (operating expenses as a percentage of revenues) was 64% compared with 64.8% reported a year ago. Improvement in this key metric is a positive for the company.

Segment Results

The Chemical & Petroleum segment generated revenues of $137.7 million, up 24% year over year. Volumes improved 12% year over year. Revenues per carload also increased 11% from the prior-year quarter.

The Industrial & Consumer Products segment generated revenues of $147.1 million, up 8% year over year. While business volumes improved 10%, revenues per carload decreased 1% year over year.

Total revenues at the Agriculture & Minerals segment were $121.7 million, down 1% year over year. While business volumes declined 9%, revenues per carload were up 9% both on a year-over-year basis.

The Energy segment generated revenues of $69.8 million, up 15% year over year. Impressive performances at the Frac Sand and Crude Oil boosted the segment’s results. While business volumes increased 3% year over year, revenues per carload rose 11%.

Intermodal revenues were $97.4 million, up 5% year over year. While business volumes improved 7%, revenues per carload decreased 2% in the reported quarter.

Revenues at the Automotive segment came in at $60.6 million, up 15% year over year. While business volumes improved 5%, revenues per carload increased 9%.

Other revenues totaled $26.1 million, up 16% year over year.

Kansas City Southern Price, Consensus and EPS Surprise

Kansas City Southern Price, Consensus and EPS Surprise | Kansas City Southern Quote

Zacks Rank

Kansas City Southern carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Investors interested in the Zacks Transportation sector are keenly awaiting fourth-quarter earnings reports from the key players like United Continental Holdings (NYSE:UAL) , Canadian National Railway Company (NYSE:CNI) and Norfolk Southern Corp. (NYSE:NSC) in the coming days. While United Continental and Canadian National are scheduled to report on Jan 23, Norfolk Southern will do the same on Jan 24.

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