Kansas City Southern Miss On Q2 Earnings, See Strong Carload Volume Growth

  • Kansas City Southern KSU reported a second-quarter revenue increase of 37% year-over-year to $749.5 million, missing the consensus of $750.77 million.
  • The increase in revenue reflects higher volumes, higher fuel surcharge, and the strengthening of the Mexican peso against the U.S. dollar for the company.
  • Adjusted EPS of $2.06 missed the consensus of $2.19.
  • Revenue by segments: Chemical & Petroleum $232.5 million (+47% Y/Y); Industrial & Consumer Products $114.6 million (+20% Y/Y); Agriculture & Minerals $139.9 million (+22% Y/Y); Energy $54.5 million (+39% Y/Y); Intermodal $91.1 million (+43% Y/Y); Automotive $49.4 million (+217% Y/Y) ; and Others $37.5 million (+4% Y/Y).
  • Carload volumes were up 31% Y/Y to 584.8K.
  • Operating expenses were $1.18 billion, including a $700 million termination fee paid to Canadian Pacific.  
  • Operating loss was $431.7 million, and the ratio was 157.6% compared to 67.1% a year ago.
  • The adjusted operating ratio was 61.4% for the quarter, compared to 65.2% in Q2 2019.
  • The company says they have deployed additional assets and crews in support of service recovery, setting the company up to continue delivering robust volume growth while improving customer service in the second half of 2021.
  • During the quarter company announced a merger with Canadian National Railway CNI.
  • Price Action: KSU shares traded higher by 0.25% at $270 premarket session on the last check Friday.
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