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Second Quarter 2019 Results
Kansas City Southern (KCS) (NYSE:KSU) reported record revenues of $714 million, an increase of 5% from second quarter 2018. Overall, carload volumes were flat compared to prior year.
Revenue growth for the second quarter of 2019 was led by a 19% increase in Chemicals and Petroleum due to growth in shipments related to Mexico energy reform, and a 5% increase in Automotive. These increases were partially offset by revenue declines in the remaining four commodity groups. Energy revenues declined by 5%, as increased Utility Coal shipments were more than offset by declines in Frac Sand and Crude Oil. Industrial & Consumer Products and Agriculture & Minerals revenues each declined by 2%, and Intermodal revenues declined by 1%.
In the second quarter of 2019, reported operating expenses were $506 million. Excluding restructuring charges related to PSR initiatives, adjusted operating expenses were $455 million, 4% higher than 2018. Adjusted operating income was $259 million, 5% higher than a year ago. KCS reported an adjusted second quarter operating ratio of 63.7%, a 0.3 point improvement over second quarter 2018.
Reported net income in the second quarter of 2019 was $129 million, or $1.28 per diluted share, compared with $148 million, or $1.45 per diluted share in the second quarter of 2018. As presented in the following reconciliations, adjusted diluted earnings per share was $1.64, 6% higher than a year ago.
“The Company is handling the same volume as last year with fewer assets, fewer crewstarts and considerably less network congestion, driving an improvement in customer service, operating metrics and cost profile,” stated Kansas City Southern’s President and Chief Executive Officer Patrick J. Ottensmeyer.” This improvement in cost profile helped us absorb a 130 basis point headwind to our adjusted operating ratio from the loss of the Mexican Fuel Excise Tax credit, while still improving profitability versus prior year.
“I am extremely pleased with the commitment, enthusiasm and cross-functional teamwork that my Kansas City Southern colleagues have demonstrated in the early stages of executing Precision Scheduled Railroading principles. Together we are building a more consistent, reliable and resilient network that is positioned to deliver excellent customer service and strong operating leverage as volume and revenue growth improves.”
From a Kansas City Southern news release
The post Kansas City Southern reports record second quarter results appeared first on Railway Track and Structures.
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