Kansas City Southern Earnings: Here’s Why Investors are Celebrating

Kansas City Southern (NYSE:KSU) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up over 3%.

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Kansas City Southern Earnings Cheat Sheet

Results: Net income decreased -3.34% to $92.5 million (92 cents per diluted share) in the quarter versus a net gain of $95.7 million in the year-earlier quarter.

Revenue: Rose 7.37% to $569.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Kansas City Southern reported adjusted net income of 92 cents per share. By that measure, the company beat the mean analyst estimate of $0.82. It beat the average revenue estimate of $565.2 million.

Quoting Management: “KCS reported a fourth quarter 2012 operating ratio of 69.5% compared to 71.6% in the fourth quarter of 2011. For the full year, KCS’ adjusted operating ratio was 69.9%, a 2.2 point improvement to the full year 2011 adjusted operating ratio of 72.1%.”

Key Stats:

Revenue decreased 1.39% from $577.4 million in the previous quarter. Net income increased 2.66% from $90.1 million in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.92 to a profit $0.9. For the current year, the average estimate has moved down from a profit of $3.28 to a profit of $3.24 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)