Kansas City Southern (KCS) has announced its financial results for the quarter ended September 30, 2014. It reported revenue of $678m, an increase of 9% over third quarter 2013; this was built on a 4% increase in carloads. The company also recorded operating income of $229m, 15% higher than operating income in the third quarter of 2013. Accordingly KCS’s margin stood at 33.78%.
Third quarter revenue growth compared to 2013 was led by a 28% increase in automotive and a 13% increase in industrial & consumer products revenue. Intermodal and agriculture & minerals were also strong, growing by 11% and 8%, respectively. Chemical & petroleum revenue grew by 7%. Energy revenue declined by 4%, primarily due to a decline in utility coal and frac sand shipments.
Operating expenses in the third quarter were $448m, 6% higher than Q3 2013 operating expenses. Operating income for the third quarter of 2014 was $229m, a 15% increase year-on-year. KCS achieved a third quarter 2014 operating ratio of 66.1%, a 1.7 point improvement on third quarter of 2013.
“KCS achieved record quarterly financial results as a result of the continued strength and diversity of our franchise,” stated KCS’s President and Chief Executive Officer David Starling. “An operating ratio of 66.1% was attained primarily due to volume growth, especially in the automotive and grain commodity groups, as well as system efficiency and cost controls.”
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