Record revenue and soaring profit boost Kansas City Southern

A surge in rail shipping led to record fourth-quarter revenue and a sharply higher profit at Kansas City Southern, the company said Friday.

The Kansas City-based railroad reported quarterly growth in five of its six freight-hauling groups, led by a 13 percent increase in automotive and 9 percent gains in chemicals-petroleum and energy. However, agriculture and mineral revenue declined 5 percent, mostly because of a decline in grain shipments compared with a strong 2013 fourth quarter, the company said.

Overall, shipping volume was 5 percent higher than in the fourth quarter of 2013.

For the final three months of 2014, Kansas City Southern generated revenue of $643 million, up 4 percent from the fourth quarter of 2013. Net income totaled $142 million, up from $114 million in the same period the previous year.

For the full year, the railroad’s revenue was a record $2.6 billion, up 9 percent from 2013. Net income climbed to $504 million from $353 million in 2013.

David Starling, the company’s president and chief executive officer, said in the earnings report that the company “met its stated target of high single-digit year-over-year revenue growth.”

In 2015, Starling said the company, which has major north-south rail lines, is “well positioned to maintain its growth momentum, driven by a strengthening economy and unique franchise opportunities.” In particular, Starling said he expects “volume growth in crude oil traffic originating in Canada and terminating at various Gulf locations.”

This story was originally published January 23, 2015 at 9:45 AM with the headline "Record revenue and soaring profit boost Kansas City Southern."