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April 27, 2020 10:30 AM, EDT

Kansas City Southern Reports Record Q1 Revenue

Kansas City SouthernLuke Sharrett/Bloomberg News

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Kansas City Southern reported record revenue and an increase in profit for the first quarter of 2020. The Kansas City, Mo.-based Class I freight railroad said net revenue rose 8% year-over-year to $731.7 million, compared with $674.8 million a year ago, while net income was up 30.2% year-over-year to $45.2 million, or $1.59 a share, compared with $34.7 million or $1.02 a share in Q1 2019.

The company’s leadership acknowledged the strong results, but said they have had to shift their focus in recent weeks because of the coronavirus pandemic.

“As pleased as we are with this exceptional performance, we have now turned our full attention to the rapidly changing operating and economic environment,” CEO Patrick J. Ottensmeyer said in an April 17 statement. “The COVID-19 pandemic presents KCS and companies across the globe with unprecedented challenges and uncertainty. We are responding by prioritizing the safety of our employees and ensuring business continuity. At the same time, we are focusing intently on rightsizing our resources in the face of declining volumes, while remaining prepared for a return to volume growth.”

Kansas City Southern

Ottensmeyer

The company’s operating ratio improved to 59.7% from 66.2%. Operating ratio, or operating expenses as a percentage of revenue, is used to measure efficiency. The lower the ratio, the higher the company’s ability to generate profit.

The company said quarterly revenue from chemical and petroleum shipments increased 18% to $198.6 million from $168.6 million. Industrial and consumer products saw a 6% jump in revenue to $159 million from $149.8 million. Revenue from agriculture and mineral shipments rose 9% to $134.5 million from $122.9 million.

The only sector to see a decrease was energy, which includes coal and sand used in oil and natural gas hydraulic fracking. That division’s revenue dropped 6% to $53.9 million from $57.9 million.

RoadSigns

 

Much of the trucking industry relies on older onboard technology for critical functions, which can hurt reliability and efficiency. So is it time for fleets and their technology vendors to implement faster replacement cycles for onboard tech? Seth Clevenger talks to Ray Greer of Omnitracs and Deryk Powell of Velociti. Hear a snippet, above, and get the full program by going to RoadSigns.TTNews.com
 

Much of the West Texas oil industry has been decimated by the huge drop in oil prices caused by the recession, and the price war between Saudi Arabia and Russia has kept supplies high, even as global oil consumption dropped from 100 million barrels per day to 70 million barrels.

Of the Class 1 railroads, KCS is the only one to run a dedicated freight system through an agreement with the Mexican government. The majority of the rail system spans from the Valley of Mexico to the U.S. border at Laredo, Texas. There also are tracks connecting to the port cities of Lázaro Cárdenas and Veracruz, giving railroad access to the Gulf of Mexico and the Pacific Ocean to the U.S. border.

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