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Kansas City Southern (KSU) Q4 Earnings Miss, Decline Y/Y
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Railroad operator Kansas City Southern performed disappointingly in the fourth quarter of 2016, reporting lower-than-expected earnings per share and revenues.
The company’s earnings (on an adjusted basis) of $1.12 per share, missed the Zacks Consensus Estimate of $1.17. Earnings decreased 9% on a year-over-year basis. Kansas City Southern reported revenues of $598.5 million which fell short of the Zacks Consensus Estimate of $608.1 million. Revenues were flat on a year-over-year basis.
Results were hurt by a 10% drop in revenues at the Energy segment. Moreover, weakness of the Mexican peso versus the US dollar also contributed to the lackluster performance.
In the reported quarter, operating income declined 4% to $211 million. Operating ratio (operating expenses as a percentage of revenues) stood at 64.8% in the reported quarter as against 63.4% in the year-ago quarter. Carload volumes were flat on a year-over-year basis.
Price Performance
Shares of Kansas City Southern have been laggards for quite some time, underperforming the Zacks-categorized Transportation-Rail industry over the last three months. Shares of Kansas City Southern have declined 7.6% in the last three months, while the industry has witnessed a growth of 11.4% in the same period.
The lackluster fourth-quarter results have dealt a further blow to the company.
Segment Results
The Chemical & Petroleum segment generated revenues of $111.4 million, down 7% year over year. However, volumes deteriorated 9% year over year. Revenues per carload improved 1% from the prior-year quarter.
The Industrial & Consumer Products generated revenues of $136 million, up 5% year over year. Business volumes increased 6%, whereas revenues per carload decreased 1% from the prior-year quarter.
The Agriculture & Minerals segment revenues totaled $122.5 million, up 13% year over year. Business volumes climbed 10%, whereas revenues per carload were up 2%, both on a year-over-year basis.
The Energy segment generated revenues of $60.7 million, down 10% year over year. Below par performances of Utility Coal and crude oil hurt the segment’s results. Business volumes dropped 10% year over year, while revenues per carload deteriorated 1%.
Intermodal revenues were $92.5 million, down 1% year over year. Business volumes dropped 1%, while revenues per carload improved 1% year over year.
The Automotive segment accounted for $52.9 million of the total revenue, down 3% year over year. Business volumes improved 19%, whereas revenues per carload plunged 18%.
Other revenues totaled $22.5 million, down 4% year over year.
Kansas City Southern Price, Consensus and EPS Surprise
Investors interested in the transportation sector are keenly awaiting for fourth-quarter earnings reports from key players like Canadian National Railway Company (CNI - Free Report) , Norfolk Southern Corp. (NSC - Free Report) and Hawaiian Holdings, Inc. (HA - Free Report) in the coming days. Hawaiian Holdings and Canadian National are scheduled to report on Jan 24, while Norfolk Southern will report on Jan 25.
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Kansas City Southern (KSU) Q4 Earnings Miss, Decline Y/Y
Railroad operator Kansas City Southern performed disappointingly in the fourth quarter of 2016, reporting lower-than-expected earnings per share and revenues.
The company’s earnings (on an adjusted basis) of $1.12 per share, missed the Zacks Consensus Estimate of $1.17. Earnings decreased 9% on a year-over-year basis. Kansas City Southern reported revenues of $598.5 million which fell short of the Zacks Consensus Estimate of $608.1 million. Revenues were flat on a year-over-year basis.
Results were hurt by a 10% drop in revenues at the Energy segment. Moreover, weakness of the Mexican peso versus the US dollar also contributed to the lackluster performance.
In the reported quarter, operating income declined 4% to $211 million. Operating ratio (operating expenses as a percentage of revenues) stood at 64.8% in the reported quarter as against 63.4% in the year-ago quarter. Carload volumes were flat on a year-over-year basis.
Price Performance
Shares of Kansas City Southern have been laggards for quite some time, underperforming the Zacks-categorized Transportation-Rail industry over the last three months. Shares of Kansas City Southern have declined 7.6% in the last three months, while the industry has witnessed a growth of 11.4% in the same period.
The lackluster fourth-quarter results have dealt a further blow to the company.
Segment Results
The Chemical & Petroleum segment generated revenues of $111.4 million, down 7% year over year. However, volumes deteriorated 9% year over year. Revenues per carload improved 1% from the prior-year quarter.
The Industrial & Consumer Products generated revenues of $136 million, up 5% year over year. Business volumes increased 6%, whereas revenues per carload decreased 1% from the prior-year quarter.
The Agriculture & Minerals segment revenues totaled $122.5 million, up 13% year over year. Business volumes climbed 10%, whereas revenues per carload were up 2%, both on a year-over-year basis.
The Energy segment generated revenues of $60.7 million, down 10% year over year. Below par performances of Utility Coal and crude oil hurt the segment’s results. Business volumes dropped 10% year over year, while revenues per carload deteriorated 1%.
Intermodal revenues were $92.5 million, down 1% year over year. Business volumes dropped 1%, while revenues per carload improved 1% year over year.
The Automotive segment accounted for $52.9 million of the total revenue, down 3% year over year. Business volumes improved 19%, whereas revenues per carload plunged 18%.
Other revenues totaled $22.5 million, down 4% year over year.
Kansas City Southern Price, Consensus and EPS Surprise
Kansas City Southern Price, Consensus and EPS Surprise | Kansas City Southern Quote
Upcoming Releases
Investors interested in the transportation sector are keenly awaiting for fourth-quarter earnings reports from key players like Canadian National Railway Company (CNI - Free Report) , Norfolk Southern Corp. (NSC - Free Report) and Hawaiian Holdings, Inc. (HA - Free Report) in the coming days. Hawaiian Holdings and Canadian National are scheduled to report on Jan 24, while Norfolk Southern will report on Jan 25.
Kansas City Southern currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>