Kansas City Southern Reports Record Fourth Quarter And Full-Year 2011 Revenues, Carloads And Operating Income

Kansas City Southern (KCS) (NYSE:KSU) reported record fourth quarter 2011 revenues of $530 million. Fourth quarter carloads of 522 thousand, also a record, increased 7% over fourth quarter 2010.

Fourth quarter revenue growth, compared to 2010 was led by a 30% increase in Automotive and a 29% increase in Intermodal revenues. Coal was also strong with revenues growing by 20% in the fourth quarter of 2011. Industrial and Consumer Products were up 8% over 2010. Agriculture and Minerals revenue grew 2%. Revenue in Chemical & Petroleum declined 1% in the fourth quarter in part due to inventory destocking, a maintenance outage at a major refinery and a customer’s contractual obligation to balance shipments between KCS and another carrier.

Operating income for the fourth quarter of 2011 was $150 million compared with $135 million a year ago, an 11% increase. KCS reported a fourth quarter 2011 operating ratio of 71.6%, an improvement from fourth quarter 2010. Operating expenses in the fourth quarter were $380 million compared with $344 million in the corresponding 2010 period. The increase was in part due to higher expenses related to fuel and incentive compensation.

Reported net income to common stockholders in the fourth quarter of 2011 totaled $96 million, or $0.87 per diluted share, compared with $52 million, or $0.50 per diluted share, in the fourth quarter of 2010. Excluding debt retirement costs, adjusted diluted earnings per share for fourth quarter 2011 was $1.01 compared to $0.62 in 2010. Both the 2011 reported and adjusted diluted earnings per share include a tax benefit of $0.23 per share, largely related to foreign exchange rate fluctuation.

For the full year 2011, revenue was a record $2.1 billion, up 16% over 2010. This is the first time that KCS generated annual revenue above $2 billion. Carloads for 2011 were 2 million, the first time annual volumes reached the 2 million threshold.