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KCS updates capital allocation policy

Rail News Home Kansas City Southern 11/10/2020 Rail News: Kansas City Southern
image Kansas City Southern announced today that its board approved updates to its capital allocation policy. The new policy intends to continue deploying cash so that 40% to 50% will go to capital projects and strategic investments and 50% to 60% to share repurchases and dividends, KCS officials said in a press release. Also, from time to time, KCS plans to use additional debt to support the revised policy and intends to increase its debt-to-EBITDA ratio. The board also approved an increase in the quarterly dividend on KCS common stock from 40 cents to 44 cents per share; and a new $3 billion share repurchase program, which will expire Dec. 31, 2023. "Kansas City Southern's revenue growth, margin improvement and cash flow generation this year have been remarkable given the economic and operational challenges we have faced," said President and Chief Executive Officer Patrick Ottensmeyer. "Our plan to prudently increase the amount of capital returned to shareholders demonstrates management's and our board's confidence in our strong growth prospects, ability to continue delivering on our long-range plan and the long-term efficiencies and lower capital spend intensity created by our precision scheduled railroading implementation." The policy will continue to balance the company's objectives of delivering "meaning capital returns while investing in future growth opportunities and maintaining a desirable credit profile," Ottensmeyer added.

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KCS posts 'strong' Q3 financial results

Kansas City Southern today reported third-quarter 2020 revenue declined 12 percent to $659.6 million compared with the same period a year ago, as carload volumes fell 4 percent during the global COVID-19 pandemic.

The Class I's Q3 operating expenses were $388.1 million, down from $465.7 million, and operating income was $271.5 million, down from $282 million a year ago. KCS posted an operating ratio of 58.8 percent for the quarter, down from 62.3 percent in Q3 2019. Net income was $190.2 million, or $2.01 per diluted share, up from $180.6 million, or $1.81 per diluted share, a year ago.

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Protestors' blockade impacts KCS freight movement in Mexico

Rail News Home Kansas City Southern 9/23/2020 Rail News: Kansas City Southern
image The blockades have halted the movement of freight to and from the Port of Lazaro Cardenas.Photo – Kansas City Southern de Mexico

A protestors' blockade has obstructed rail tracks between Caltzontzin and La Vinata, Mexico, which has affected Kansas City Southern de Mexico's rail traffic for the past three weeks, MexicoNewsDaily.com reported.

More than 70 teachers and teachers in training have been blocking the tracks in Michoacan, Mexico, halting the movement of freight to and from the Port of Lazaro Cardenas. The KCSM traffic mainly consists of steel, petroleum and automotive products, the news site reported.

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KCS rejects takeover bid, report says

Rail News Home Kansas City Southern 9/11/2020 Rail News: Kansas City Southern
image Kansas City Southern has rejected a $20 billion takeover offer from an investor group, the Wall Street Journal reported Wednesday. Global Infrastructure Partners and the infrastructure arm of private-equity firm Blackstone Group Inc. offered KCS $208 a share, the paper reported, citing people familiar with the situation. KCS rejected the bid, arguing it undervalued the company. KCS turned away an earlier bid that was below $200 a share. The two sides are not in discussions, the paper reported.

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KCS Holiday Express train won't run in 2020

Rail News Home Kansas City Southern 9/9/2020 Rail News: Kansas City Southern
image The KCS Holiday Express project's charitable component has raised more than $2.1 million over the past 19 years.Photo – Kansas City Southern

Kansas City Southern has canceled this year's Holiday Express train due to the pandemic, but the railroad will mark the charitable program's 20th year with a fundraiser to benefit The Salvation Army in 20 communities along the KCS network.

"While it is not safe to gather for free visits with Santa Claus and tours of the Holiday Express train this year, the need for the charitable component of this program is greater than ever," KCS President and Chief Executive officer Patrick Ottensmeyer said in a press release.

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