Kansas City Southern logged record third-quarter 2019 revenue of $747.7 million, a 7 percent increase over the same quarter a year ago, the Class I announced today.
The railroad was helped by a 21 percent increase in refined fuel shipments to Mexico, as well as cost-cutting efforts. Overall, carload volumes were flat in the quarter compared with last year, KCS officials said in a press release.
KCS reported third-quarter operating income of $282 million, with a record adjusted operating income of $294 million — a 15 percent increase from Q3 2018, excluding restructuring charges related to precision scheduled railroading (PSR) and a gain on insurance recoveries.
KCS posted an operating ratio (OR) of 62.3 percent and an adjusted OR of 60.7 percent, compared with 63.4 percent in the prior year.
Net income for the quarter was $180.6 million, or $1.81 earnings per diluted share, compared with $174 million, or $1.70 per diluted share in Q3 2018. Adjusted diluted earnings per share of $1.94 was up 24 percent over the same period last year.
KCS reported operating expenses of $465.7 million and adjusted expenses of $453.7 million, up 2 percent over Q3 2018.
“Kansas City Southern posted all-time record financial results in the third quarter 2019, including adjusted operating income growth of 15 percent and an adjusted operating ratio of 60.7 percent,” said President and Chief Executive Officer Patrick Ottensmeyer. “We are very pleased with our progress toward implementing PSR principles. Notwithstanding this exceptional performance, we expect to continue optimizing our cost profile while delivering superior customer service and shareholder value.”
Q3 revenue growth was led by a 21 percent increase in chemicals and petroleum due to increased refined fuel products and liquid petroleum gas shipments to Mexico, KCS officials reported.
In addition, agriculture and minerals revenue grew 15 percent, driven primarily by improved cycle times; and industrial and consumer products and intermodal revenue rose by 2 percent and 1 percent, respectively.
Meanwhile, Q3 energy revenue declined by 11 percent, as higher utility coal shipments were offset by declines in frac sand and crude oil shipments; and automotive revenue fell by 2 percent.