Kansas City Southern, a regional U.S. railroad operator with extensive operations in Mexico, lowered its full-year volume growth forecast on Friday after posting a disappointing 1 percent increase for the second quarter.
Kansas City Southern now sees 2018 volume growth of approximately 3 percent to 4 percent versus its previous call for a mid-single-digit percentage rise.
“As we move into the second half of 2018 and 2019, we expect volume growth to accelerate,” Chief Executive Officer Patrick Ottensmeyer said in a statement.
Kansas City Southern’s operating ratio marginally increased to 64 percent from a year earlier. Operating ratio measures operating costs as a percentage of revenue and is a closely watched gauge of railroad performance. Lowering that ratio improves profitability.
Net income available to shareholders rose more than 10 percent to $148.2 million, or $1.45 per share, helped by higher volumes for petroleum, autos and chemicals.
On an adjusted basis, the company earned $1.54 per share, beating analysts’ estimate of $1.51, according to Thomson Reuters I/B/E/S.
Revenue rose 4 percent to $682.4 million, missing analysts’ estimate of $686 million.
Shares, which had fallen as much as 1.5 percent after the market open, were up 0.7 percent at $109.20 in morning trading on the New York Stock Exchange. (Additional reporting by Arunima Banerjee in Bengaluru; Editing by Shailesh Kuber, Sriraj Kalluvila and Jonathan Oatis)
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