Business

KC Southern hit with ‘extraneous events’ in weak quarter

Service disruptions from flooding and civil unrest in Mexico contributed to a weaker third quarter at railway operator Kansas City Southern.
Service disruptions from flooding and civil unrest in Mexico contributed to a weaker third quarter at railway operator Kansas City Southern.

Kansas City Southern suffered a drop in revenues and profits during the third quarter, with management citing “extraneous events” as adding to its costs.

The railway said Tuesday it collected $605 million in revenues, a 4 percent decline from the third quarter of last year. The company said revenues were lower in its energy, automotive, agriculture, and industrial and consumer products operations.

Profits of $120.6 million, or $1.12 a share, were down nearly 8.4 percent from a year earlier when Kansas City Southern earned $131.6 million, or $1.20 a share, during July, August and September.

“Kansas City Southern faced a challenging third quarter as extraneous events, including flooding outages and service disruptions on our Mexican network, resulted in additional operating costs,” chief executive Patrick J. Ottensmeyer said in the company’s announcement.

A late July statement by the company had said civil protests against the government in Mexico had blocked tracks. There were flooding problems earlier this year as well.

Kansas City Southern shares fell $2.13, or 2.25 percent, to close at $92.58.

The announcement Tuesday also said expenses grew in the recent quarter as the company “recorded a year-to-date adjustment to increase the incentive compensation level for the year.”

Profits through the first nine months of 2016 were $348.5 million, ahead of the year-ago total of $344.2 million through September.

Mark Davis: 816-234-4372, @mdkcstar

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