Yahoo Finance Kansas City Southern: Key Takeaways from the Railway’s 4Q15 Earnings
On Track or Off? Kansas City Southern Railways' 4Q15 Earnings
Kansas City Southern’s 4Q15 adjusted EPS beat estimates
On January 22, 2016, the Kansas City Southern Railway Company (KSU) reported its 4Q15 and fiscal 2015 earnings. On a per-share basis, KSU reported adjusted EPS (earning per share) of $1.23, beating Wall Street analyst estimates of $1.10. However, the company’s EPS in 4Q15 went down by 3% compared to the same period in 2014.
Stock price reaction KSU’s 4Q15 results
On December 2, 2015, at the Credit Suisse Industrials Conference, KSU Chief Financial Officer Michael Upchurch announced that he anticipated that the company’s 4Q15 revenues would fall by a high single-digit percentage. The same day, KSU’s stock fell by 7%.
KSU’s shares have fallen by 14% since January 1, 2016, while the S&P 500 Index went down by approximately 9%. The year-to-date stock prices of other Class I railroads are as follows:
CSX Corporation (CSX) fell by 14.1%.
Norfolk Southern Corporation (NSC) fell by 18.5%.
Union Pacific Railroad Company (UNP) fell by 10.4%.
Canadian Pacific Railway (CP) fell by 9.4%.
Canadian National Railway (CNI) fell by 9.5%.
These companies have exposure in the iShares Core S&P 500 ETF (IVV), which holds 0.65% in all Class I railroads.
Turbulent days ahead for Kansas City Southern?
Kansas City Southern operates through one wholly owned subsidiary in the US and another in Mexico. KSU’s competitors in the US include BNSF Railway and Union Pacific Corporation (UNP), both major western carriers. In Mexico, KSU competes with Ferromex and Ferrosur.
Investors should know that Kansas City faces more competition than any other Class I railroad due to its geographical location and operations in the US Midwest. While freight trains in the US move from west to east, KSU’s trains move from north to south and down into Mexico.
What to expect from this series
In this 11-part series, we’ll go through Kansas City Southern’s 4Q15 earnings in detail and discuss the company and industry-specific factors that could affect the company’s earnings over the next year. We’ll also consider the main points of discussion from the company’s 4Q15 earnings conference call.
Let’s begin with Kansas City Southern’s missed estimates in 4Q15 revenue.
Browse this series on Market Realist:
