Post Earnings Coverage as Kansas City Southern’s Reported Q4 Results

Upcoming AWS Coverage on Norfolk Southern Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 1, 2017 / Active Wall St. announces its post-earnings coverage on Kansas City Southern (NYSE: KSU). The Company announced its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year fiscal 2016 (FY16) on January 20, 2017. The Kansas City, Missouri-based Company reported a flat revenue growth; while its diluted EPS declined on a year-over-year basis. Register with us now for your free membership at:

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One of Kansas City Southern’s competitors within the Railroads space, Norfolk Southern Corp. (NYSE: NSC), reported its Q4 financial results during a conference call and live Internet webcast on Wednesday, January 25, 2017. AWS will be initiating a research report on Norfolk Southern in the coming days.

Today, AWS is promoting its earnings coverage on KSU; touching on NSC. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=KSU

http://www.activewallst.com/registration-3/?symbol=NSC

Earnings Reviewed

During the quarter ended on December 31, 2016, Kansas City Southern reported revenues of $598.5 million compared to $598.0 million recorded at the end of Q4 FY15. Revenue numbers for Q4 FY16 lagged behind market consensus estimates of $608.1 million. However, excluding the estimated impact of Mexican peso depreciation, the Company registered a 3% y-o-y growth in its revenues during Q4 FY16.

The railroad Company’s net income fell to $130.3 million, or $1.21 per diluted share, in Q4 FY16, from $140.0 million, or $1.28 per diluted share, in Q4 FY15. The Company reported adjusted net income available to common stockholders of $120.1 million, or $1.12 per diluted share in Q4 FY16, compared to $133.4 million, or $1.23 per diluted share in Q4 FY15. Wall Street had expected the Company to report adjusted net income available to common stockholders of $1.17 per diluted share.

For FY16, Kansas City Southern’s revenues came in at $2.33 billion compared to $2.42 billion in the previous year’s same period. The Company reported net income of $479.9 million, or $4.43 per diluted share in FY16 versus $485.3 million, or $4.40 per diluted share, in FY15. Furthermore, the Company’s adjusted net income available to common stockholders stood at $483.3 million, or $4.48 per diluted share, in FY16 compared to $494.0 million, or $4.49 per diluted share in FY15.

Operational Metrics

For the reported quarter, the Company’s total operating expenses were $387.6 million compared to $379.1 million in Q4 FY15. The Company’s operating income for Q4 FY16 came in at $210.9 million compared to $218.9 million in Q4 FY15. However, Kansas City Southern’s operating ratio improved 1.4 points to 64.8% in Q4 FY16. The carload volume during Q4 FY16 remained flat at 555.2 thousand versus 555.8 thousand in Q4 FY15.

Segment-wise

Kansas City Southern’s Chemical & Petroleum revenues fell 7% y-o-y to $111.4 million in Q4 FY16. The segment’s carloads volume was down by 9% y-o-y in Q4 FY16 to 60.7 thousand. However, average revenue per car grew during Q4 FY16 to $1,835 from $1,811 in the prior year’s comparable quarter.

Industrial & Consumer Products segment’s revenue grew 5% y-o-y to $136.0 million in Q4 FY16. The segment’s carloads volume also rose 6% y-o-y to 76.6 thousand in Q4 FY16. However, the average revenue per car fell during Q4 FY16 to $1,775 from $1,790 in last year’s corresponding quarter.

The Company’s Agriculture & Minerals segment’s revenue gained 13% y-o-y to $122.5 million in Q4 FY16. During the reported period, the carloads volume improved 10% to 66.8 thousand. Meanwhile, average revenue per car also increased 2% y-o-y to $1,834 in Q4 FY16.

Energy segment’s revenues dropped 10% y-o-y in Q4 FY16 to $60.7 million with total carload volume also declining 10% y-o-y to 71.4 thousand. Furthermore, the revenues per car were down by 1% y-o-y in Q4 FY16 to $850.

During Q4 FY16, Intermodal revenues were down by 1% y-o-y to $92.5 million. The segment’s carloads volume also declined 1% y-o-y to 240.8 thousand during Q4 FY16. Moreover, average revenue per car grew 1% y-o-y to $384 in the reported period.

In Q4 FY16, Automotive revenues were down by 3% y-o-y to $52.9 million. However, carload volumes surged 19% y-o-y to 38.9 thousand. Meanwhile, average revenue per car declined 18% y-o-y to $1,360 in Q4 FY16.

Cash Flow & Balance Sheet

During FY16, net cash provided by operating activities totaled $913.3 million compared to $909.3 million in the prior year’s same period. At the close of books on December 31, 2016, the Company had $170.6 million in cash and cash equivalents compared to $136.6 million at the close of books on December 31, 2015. Furthermore, the Company reported long-term debt of $2.27 billion as on December 31, 2016, compared to $2.05 billion as on December 31, 2015.

Dividend and Share Repurchase

In a separate press release on January 26, 2017, Kansas City Southern’s Board of Directors declared a regular dividend of $0.33 per share on the outstanding common stock, payable on April 05, 2017, to common stockholders of record at the close of business on March 13, 2017.

The Company continued its share repurchase program in Q4 FY16 and on a cumulative basis, and has repurchased 4.3 million shares for approximately $380 million. Furthermore, the Company continues to expect the conclusion of the program by June 30, 2017.

Stock Performance

At the closing bell, on Tuesday, January 31, 2017, Kansas City Southern’s stock marginally slipped 0.52%, ending the trading session at $85.91. A total volume of 2.24 million shares were traded at the end of the day, which was higher than the 3-month average volume of 2.08 million shares. In the last month and previous twelve months, shares of the Company have advanced 1.72% and 20.64%, respectively. Moreover, the stock gained 1.25% since the start of the year. The Company’s shares are trading at a PE ratio of 19.37 and have a dividend yield of 1.54%.

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