Kansas City Southern Earnings: Here’s Why Shares are Up Now

Kansas City Southern (NYSE:KSU) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 1.38%.

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Kansas City Southern Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 18.67% to $0.89 in the quarter versus EPS of $0.75 in the year-earlier quarter.

Revenue: Rose 0.97% to $552.8 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Kansas City Southern reported adjusted EPS income of $0.89 per share. By that measure, the company beat the mean analyst estimate of $0.88. It missed the average revenue estimate of $571.33 million.

Quoting Management: “During the first quarter of 2013, KCS experienced consistently strong revenue growth from the shipment of crude oil (+ 369%), automotive (+31%) and cross-border intermodal (+71%),” stated President and Chief Executive Officer David L. Starling. “The positive contribution from these growth areas was partially offset by a decline in grain revenues (-38%), the result of a severe drought which impacted major sections of the U.S.’s corn crop last year. We believe that if harvest levels return to normal in the fall, the KCS grain revenues should rebound later in 2013.”

Key Stats (on next page)…

Revenue decreased 2.74% from $568.4 million in the previous quarter. EPS decreased 3.26% from $0.92 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.98 and has not changed. For the current year, the average estimate has moved up from a profit of $4.06 to a profit of $4.14 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)