Kansas City Southern (KCS) on April 19, 2016 reported a first quarter 2016 operating ratio of 66.6%, a 2.3-point improvement from 70.5% in first quarter 2015. KCS also reported first quarter 2016 revenues of $563 million, a decrease of 7% from first quarter 2015.
Overall, carload volumes were 5% lower than in first quarter 2015. Excluding the estimated impacts of Mexican peso depreciation and lower U.S. fuel prices, revenue declined 1% compared to the first quarter of 2015, KCS says. Operating expenses in the first quarter were $375 million, 12% lower than 2015; Adjusted operating expenses decreased 3% compared to the first quarter of 2015.
Operating income for the first quarter of 2016 was $188 million, which was flat compared to first quarter 2015 when excluding 2015 lease termination costs. KCS reported a first quarter 2016 operating ratio of 66.6%, a 2.3-point improvement from first quarter 2015, when excluding 2015 lease termination costs. Reported net income in the first quarter of 2016 totaled $108 million, or $0.99 per diluted share, compared with $101 million, or $0.91 per diluted share, in the first quarter of 2015. Excluding the impacts of foreign exchange rate fluctuations and 2015 lease termination costs, adjusted diluted earnings per share for first quarter 2016 was $1.03 which was flat compared to 2015.
“Despite flooding that shut down key portions of our U.S. rail network for over three weeks, KCS delivered solid earnings and operating results,” stated CEO David L. Starling. “That we overcame this very significant challenge while simultaneously scaling costs across the network clearly demonstrated KCS’ ability to react quickly to rapid and unexpected changes to its operating environment.”