Kansas City Southern’s (KSU - Free Report) third-quarter 2019 earnings (excluding 13 cents from non-recurring items) of $1.94 beat the Zacks Consensus Estimate by 17 cents. The bottom line also improved 23.6% on a year-over-year basis. Results were aided by a better operational performance. This outperformance on the earnings front seems to have found favor with investors. As a result, the stock gained in early trading.
The company delivered revenues of $747.7 million, surpassing the Zacks Consensus Estimate of $730.3 million. Moreover, the top line improved 7% on a year-over-year basis, mainly owing to strong performances at the Chemicals and Petroleum and the Agriculture & Minerals units.
Overall, carload volumes were flat year over year as growth in the above-mentioned units was mitigated by declines in the Energy, Automotive and Intermodal segments.
In the reported quarter, operating income (on a reported basis) increased 6.3% to $282 million. Moreover, operating income (excluding restructuring charges pertaining to Precision Scheduled Railroading initiatives and a gain on insurance recoveries) rose 15% to $294 million.
Kansas City Southern’s adjusted operating ratio (operating expenses as a percentage of revenues) improved to 60.7% from 63.4% a year ago. Lower the value of the metric the better.