Kansas City Southern (KCS) has reported revenues of $599 million for the 2016 fourth quarter, unchanged from the fourth quarter of 2015. When excluding estimated impacts of Mexican peso depreciation, revenues would have increased by 3 percent compared to the fourth quarter of 2015.
Net income in the fourth quarter of 2016 totaled $130 million, or $1.21 per diluted share, compared with $140 million, or $1.28 per diluted share, in the fourth quarter of 2015. Adjusted diluted earnings per share, which excluded the impacts of exchange rate fluctuations, debt retirement and exchange costs, were $1.12 compared to $1.23 in the fourth quarter of 2015.
Carload volumes remained unchanged when compared to last year’s fourth quarter, with a total of 555 thousand.
Operating income for the fourth quarter of 2016 was $211 million, a 4 percent decrease compared to last year’s fourth quarter. The fourth quarter 2015 operating ratio increased 1.4 points to 64.8 percent compared to the 2015 fourth quarter.
Operating expenses were $388 million in the 2016 fourth quarter, 2 percent higher than the 2015 fourth quarter. Excluding estimated impacts of peso depreciation, operating expenses were up by 7 percent compared to the 2015 fourth quarter.
For the 2016 full year, KCS had revenues of $2.3 billion, a 3 percent decrease compared to 2015 revenues.
Reported net income for 2016 totaled $480 million, or $4.43 per diluted share, compared with $485 million, or $4.40 per diluted share, in 2015. Adjusted diluted earnings per share, which excluded the impacts of exchange rate fluctuations and 2015 lease termination and debt retirement and exchange costs, were $4.48 compared to $4.49 in 2015.
A 2 percent decline was reported for 2016 full year carload volumes when compared to 2015. Carloads totaled 2.17 million.
Operating income for 2016 was $819 million, up 2 percent from 2015. The 2016 operating ratio improved 1.9 points to 64.9 percent compared to last year’s and a 1.5 point improvement from the 2014 adjusted operating ratio.
KCS President and CEO Patrick J. Ottensmeyer said, “KCS’ ability to react swiftly and efficiently was proven throughout 2016, as our network faced challenging operational interruptions throughout the year. In addition, volatility in key commodities such as energy, consumer, and intermodal markets created uncertainty during 2016.”
“Despite these conditions, KCS’ achieved a full-year operating ratio of 64.9 percent, a 1.5 point improvement versus 2015 adjusted,” added Ottensmeyer.
“Looking ahead to 2017, the Company is aware of both economic and political uncertainty. However, we continue to emphasize our commitment to growth and we are well positioned to take full advantage of the significant new business opportunities that lie ahead of us,” Ottensmeyer concluded.