Mark Szakonyi, Associate Editor | Jul 17, 2012 10:22AM EDT
Double-digit increases in intermodal and automotive shipments helped drive Kansas City Southern profit up 83 percent year-over-year to $120 million in the second quarter.
The smallest of the five U.S. Class I railroads saw revenue tick up roughly 2 percent to $545.3 million in the same period, as carload traffic rose 4 percent year-over-year and 2 percent from the prior quarter. Intermodal revenue rose 23.2 percent on a 17.1 percent jump in volume, while automotive revenue increased 15.1 percent on a 17.6 percent rise in traffic.
“It is anticipated that finished automotive production in Mexico will grow by more than 30 percent between now and 2015. KCS is well-positioned to benefit from this growth,” said KCS President and CEO David Starling. “In addition, the ripple effect from finished auto production on other commodity groups such as plastics, steel, glass and intermodal bodes well for KCS’s overall business mix over the long-term.”
He said cross border intermodal volume jumped 106 percent in the second quarter compared to the same period in 2012. The railroad’s Mexican arm, Kansas City Southern de Mexico, benefited from a 20 percent rise in carloads out of the Port of Lazaro Cardenas.
“With Lazaro Cardenas being the fastest-growing container port in North America, and with a second port concession now being added, these opportunities will benefit the company for many years,” Starling said.
Utility coal volume fell about 18 percent year-over-year in the second quarter, pulling revenue down 18.8 percent. A 16.3 percent rise in frac sand traffic helped offset sluggish coal traffic.
The average revenue per intermodal unit, a key measure of pricing, rose 5 percent, while the average amount charged for carloads and intermodal units combined ticked up 2.5 percent. KCS’s operating ratio fell 9.1 percentage points in the second quarter to 62.6 percent compared to the same period a year ago.
Contact Mark Szakonyi at mszakonyi@joc.com. Follow him on Twitter @Szakonyi_JOC.
