Why Kansas City Southern (KSU) Bombed on Friday

NEW YORK (TheStreet) -- Kansas City Southern (KSU) shares suffered a double-digit percentage drop heading into Friday's trading session after fourth-quarter earnings missed analyst expectations on both the top and bottom line.

The railroad operator reported fourth-quarter earnings of $1.03 a share, 7 cents short of consensus from analysts surveyed by Thomson Reuters. Revenue of $616 million, though an 8.5% year-over-year increase, came in $1.8 million shy of expectations.

In total, carload volumes were 2% higher than the year-ago quarter. Revenue growth was led by a 30% increase in the transportation of agriculture and minerals. Energy revenue declined 17% due to a fall in utility coal shipments.

Over fiscal 2013, the Kansas City-based business pulled a record $2.4 billion in revenue, up 6% from 2012 and $30 million higher than analysts anticipated. Net income of $3.98 a share was nearly 20% higher than the year earlier but fell short of consensus for $4.05 a share.

"While some shifts in market conditions impacted volumes in our Agriculture & Minerals and Energy commodity groups, 2013 marks the fourth consecutive year KCS has recorded a double-digit percentage increase in its adjusted diluted earnings per share," said CEO David L. Starling in a statement.

"We expect to maintain our excellent growth momentum in 2014 and beyond. As 2014 evolves, investors can expect to see positive developments in a wide-range of commodity groups, including intermodal, automotive, steel and chemical & petroleum products."

In morning trading Friday, shares had dumped 19.9% to $93.97, following a flat trading range over January.

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