Second quarter revenues at the railway were down across all commodity groups, with the exception of its Chemicals and Petroleum segment, according to the company’s most recent financial statements.
Kansas City Southern, a transportation holding company that owns the Kansas City Southern Railway Company, Kansas City Southern de México, S.A. de C.V., and a 50 percent interest in Panama Canal Railway Company, reported net earnings dropped 13.85 percent to $112 million in the second quarter of 2015.
Net earnings per diluted share in the second quarter fell to $1.01 per diluted share compared with $1.18 per diluted share in the second quarter of 2014.
KCS’s second quarter revenues fell 10 percent to $586 million compared to second quarter 2014, as carload volumes slipped 6 percent. Revenues for the quarter were down across all commodity groups at the railway, with the exception of its Chemicals and Petroleum segment, which grew a paltry 1 percent. Energy revenues dropped significantly, decreasing 46 percent as a result of lower volumes in utility coal and frac sand due to lower natural gas prices volumes, which resulted from a considerable decline in U.S. drilling operations.
“KCS continued to scale its operations in both the U.S. and Mexico and has made strides in improving its network fluidity,” Chief Executive Officer David Starling said of the results. “Our actions contributed to the Company attaining a solid second quarter operating ratio despite volume challenges, particularly in its Energy commodity group. We expect our system performance and operating metrics to continue to improve throughout the remainder of the year.
“As evidenced in the weekly industry carload data, there are still uncertainties in many of the primary markets served by rail. However, KCS’ average daily volumes increased each month throughout the second quarter and the initial results from the first few weeks of July suggest the positive trend may be continuing,” added Starling.
Kansas City Southern Q2 earnings slip
