Transportation holding company
Kansas City Southern
said third-quarter earnings will be below analysts' expectations due to higher-than-anticipated expenses. The company said a new computer operating system caused rail congestion and increased operating expenses.
The company did not give an exact earning expectation. Analysts had predicted the company would earn 18 cents a share.
KCS moved to a "state-of-the-art management control system" in July, replacing its legacy system. Difficulties were encountered switching over the rail system's services and operations, and consequently, throughout July and August, rail traffic on the company's network increased, especially at terminals. The problems resulted in higher salaries, overtime and general expenses.
Though the new system increased expense, the company said it was necessary to switch to it. Ultimately, the system is expected to improve customer service and reduce systemwide expenses.
The company expects fourth-quarter expenses "will be closer to normal levels." Analysts have predicted the company will earn 19 cents a share.
Kansas City-based KCS will announce its third-quarter earnings on Oct. 31.
Shares of the company closed at $13.65 Friday on the
New York Stock Exchange