KCS 2Q revenue and earnings rise

Kansas City Southern Friday reported second-quarter net income of $71 million, or 64 cents per diluted share, compared with $35 million, or 34 cents per diluted share, in the second quart of 2010. Adjusting for debt retirement costs of $10.3 million in the second quarter of 2011 and $32.5 million in second quarter 2010, adjusted diluted earnings per share were $0.71 and $0.55 respectively, an increase of 29%.

KCS revenue for the quarter was $535 million, up 16% from the comparable 2010 quarter. Its second-quarter operating ratio of 71.7% improved compared with the 72.4% operating ratio reported for the corresponding 2010 period, despite higher fuel prices, which helped push operating expenses for the quarter to $383 million, the company said.

All commodity groups generated revenue increases, KCS said, led by a 42% rise in the company’s Automotive group. Intermodal rose 25% compared with the second quarter of 2010.

“Kansas City Southern achieved year-over-year and sequential improvement in most of its key financial and operational metrics, including carloads, revenues, operating income, and operating ratio,” said David L. Starling, KCS president and chief executive officer. “These results illustrate the continued expansion of KCS’s markets and its success in maintaining a high level of operating performance while handling record levels of traffic.

"As we look out to the remainder of the year, KCS’s full-year revenue growth is expected to be higher than the first half growth of 14%; an improvement over the low double-digit guidance we provided previously,” Starling said.

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