NEW YORK (TheStreet) -- Shares of Kansas City Southern (KSU - Get Report) are down by 2.08% to $95.09 on heavy volume in late afternoon trading on Thursday, after the railway company said in a regulatory filing that it is withdrawing its 2015 revenue and volume guidance due to what it calls "uncertainty" surrounding energy related markets, foreign exchange impacts, and U.S. fuel prices.
So far today, 4.47 million shares of Kansas City Southern have exchanged hands as compared to its average daily volume of 1.02 million shares.
The company has reiterated its operating goal of low 60s by 2017, the filing said.
Kansas City Southern's board has also authorized a share repurchase program of up to $500 million.
Kansas City Southern operates railroads in the Midwest and Mexico that run north to south, in contrast with the majority of other railroads running east to west, the Wall Street Journal reports, adding that the company's focus on cross-border traffic has resulted in revenue gains in recent years.
Separately, TheStreet Ratings team rates KANSAS CITY SOUTHERN as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate KANSAS CITY SOUTHERN (KSU) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- KANSAS CITY SOUTHERN has improved earnings per share by 7.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, KANSAS CITY SOUTHERN increased its bottom line by earning $4.56 versus $3.18 in the prior year. This year, the market expects an improvement in earnings ($5.00 versus $4.56).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Road & Rail industry average. The net income increased by 7.6% when compared to the same quarter one year prior, going from $93.70 million to $100.80 million.
- 42.50% is the gross profit margin for KANSAS CITY SOUTHERN which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 16.71% trails the industry average.
- Net operating cash flow has increased to $162.50 million or 13.39% when compared to the same quarter last year. Despite an increase in cash flow, KANSAS CITY SOUTHERN's average is still marginally south of the industry average growth rate of 22.48%.
- The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.37 is very weak and demonstrates a lack of ability to pay short-term obligations.
- You can view the full analysis from the report here: KSU Ratings Report