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Kansas City Southern (KSU) Q2 Earnings Beat on Volume Growth

Kansas City Southern 's KSU second-quarter 2018 adjusted earnings per share of $1.54 surpassed the Zacks Consensus Estimate of $1.52. The bottom line also improved 16% on a year-over-year basis, buoyed by volume growth. Overall carload volumes inched up 1% in the reported quarter.

Kansas City Southern recorded revenues of $682.4 million, which missed the Zacks Consensus Estimate of $688.1 million. However, it compared favorably with the year-ago number of $656.4 million. Strong performance at the Chemical & Petroleum and Automotive units led to this year-over-year improvement in top line.

Meanwhile, operating income increased 3% (on a reported basis) to $245.8 million. This Zacks Rank #4 (Sell) company's operating ratio (operating expenses as a percentage of revenues) deteriorated to 64% from 63.5% a year ago. Operating expenses rose 5% in the quarter under review. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

The company expects volume growth to accelerate in the latter half of 2018 and 2019, backed by a strong economy and network capacity investments.

Kansas City Southern Price, Consensus and EPS Surprise

Kansas City Southern Price, Consensus and EPS Surprise | Kansas City Southern Quote

Segmental Results

Chemical & Petroleum segment generated revenues of $157.8 million, up 14% year over year. Volumes improved 3% year over year. Revenues per carload also increased 10% from the year-ago figure.

The Industrial & Consumer Products segment raked in revenues of $152.7 million, up 3% year over year. Business volumes expanded 3% while revenues per carload remained flat year over year.

Total revenues at the Agriculture & Minerals segment inched up 1% to $125.1 million. Business volumes remained unchanged while revenues per carload were up 1%, both on a year-over-year basis.

The Energy segment generated revenues of $61.3 million, down 20% year over year. This downside was due to low utility coal volumes from a Texas utility closure this January. While business volumes dropped 18% year over year, revenues per carload contracted 3%.

Intermodal revenues totaled $93.7 million, up 3% year over year. While business volumes rose 3%, revenues per carload were flat in the reported quarter.

Revenues at the Automotive segment came in at $67.3 million, up 17% year over year. While business volumes grew 12%, revenues per carload gained 4%.

Other revenues totaled $29.3 million, up 9% year over year.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly awaiting second-quarter earnings reports from key players, namely Canadian National Railway Company CNI , Norfolk Southern Corporation NSC and United Parcel Service, Inc. UPS . While Canadian National will report second-quarter earnings on Jul 24, Norfolk Southern and UPS will announce the same on Jul 25.

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Kansas City Southern (KSU): Free Stock Analysis Report

Canadian National Railway Company (CNI): Free Stock Analysis Report

Norfolk Southern Corporation (NSC): Free Stock Analysis Report

United Parcel Service, Inc. (UPS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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