Kansas City Southern Q3 Result Misses Estimates, Carload Volumes Decline 3%

Kansas City Southern KSU reported third-quarter sales growth of 12.8% year-over-year to $744 million, missing the consensus of $750.66 million.
Revenue growth reflects mix, higher fuel surcharge, and the strengthening of the Mexican peso against the U.S. dollar.
Carload volumes were down 3% Y/Y to 560.4 thousand. Revenue per carload/unit increased by 16% Y/Y to $1,257.
Revenue by segments: Chemical & Petroleum $204.1 million (+6% Y/Y); Industrial & Consumer Products $159 million (+26% Y/Y); Agriculture & Minerals $139.8 million (+12% Y/Y); Energy $74.6 million (+59% Y/Y); Intermodal $86.9 million (-2% Y/Y); Automotive $40.1 million (-17% Y/Y).
Adjusted EPS of $2.02 missed the consensus of $2.17.
The operating income decreased by 7.2% Y/Y to $251.9 million, and the margin contracted by 730 bps to 33.9%. Adjusted operating margin declined by 247 bps to 38.8%.
Total operating expenses increased by 26.8% Y/Y to $492.1 million.
"As certain supply chain disruptions are resolved and our revenue environment improves, our network will be well-positioned to handle incremental volume while continuing to provide premium service to our customers," said CEO Patrick J. Ottensmeyer.
Price Action: KSU shares are trading lower by 0.73% at $295.23 on Tuesday.