Kansas City Southern said it had a profit of $75.3 million in the first quarter, 17 percent more than the $64.1 million earned by the railroad in the first quarter of 2011.
Revenues were $548 million in the first quarter, 12 percent more than the $489 million recorded in the first quarter of 2011.
By segment, KCS said first quarter revenue growth, compared to 2011, was led by both a 26 percent increase in intermodal and a 21 percent boost in automotive revenues.
A note from the investment firm Dahlman Rose said the company’s international intermodal volume increased 28 percent, and revenue was up 26 percent in the quarter due to growth at the Port of Lazaro Cardenas in Mexico.
“This occurred despite the 4Q11 loss of a carrier that represented over 10 percent of the company’s business through the port. We believe growth prospects at the port remain very favorable for the company,” Dahlman Rose said. “In December, the Mexican government awarded a second container terminal concession to APM terminals, which is an affiliate of Maersk. The project, which is expected to involve an investment of $900 million further solidifies the strong growth prospects at the Port of Lazaro Cardenas, which we view as a long-term positive for Kansas City Southern. Investors, however, should not expect the full impact of this concession until 2014.”
KCS said revenues from industrial and consumer products were up 17 percent, agriculture and minerals up 14 percent, chemicals and petroleum up 6 percent.
The company said it has expanded its coal business unit to “better reflect the company’s diversified opportunities in the energy sector. The expanded business unit has been renamed energy and along with coal and petroleum coke, it includes crude oil, frac sand and other new energy markets.”
It said energy revenue declined by 1 percent compared to 2011, primarily caused by a 10 percent decrease in utility coal. Coal and petroleum coke declined 7 percent in the first quarter. Partially offsetting these declines were increases in revenue from crude oil and frac sand compared to first quarter 2011.
“We are encouraged by the overall strength of our first quarter 2012 results,” said KCS President and Chief Executive Officer David L. Starling. “The company attained record first quarter volumes, revenues and operating ratio.” – Chris Dupin
KCS reports record 1Q revenues
