Third quarter revenue growth was led by a 28 percent increase in automotive, and a 13 percent increase in industrial and consumer products. Intermodal, and agriculture and minerals were also strong, growing by 11 percent and 8 percent, respectively. Chemical and petroleum revenue grew by 7 percent. Energy revenue declined by 4 percent, primarily due to a decline in utility coal and frac sand shipments on the railroad.
Operating expenses in the third quarter we`re $448 million, 6 percent higher than 2013 operating expenses. Operating income for the third quarter of 2014 was $229 million compared with $200 million a year ago, a 15 percent increase. KCS achieved a third quarter 2014 operating ratio of 66.1, a 1.7 point improvement from third quarter 2013.
“KCS achieved record quarterly financial results as a result of the continued strength and diversity of our franchise,” says President and CEO David L. Starling. “An operating ratio of 66.1 percent was attained primarily due to volume growth, especially in the automotive and grain commodity groups, as well as system efficiency and cost controls.”
Reported net income in the third quarter of 2014 totaled $138 million, or $1.25 per diluted share, compared with $119 million, or $1.07 per diluted share, in the third quarter of 2013. Excluding the impacts of foreign exchange rate fluctuations and debt retirement costs, adjusted diluted earnings per share for third quarter 2014 was $1.29, compared with $1.10 in the third quarter of 2013, a 17 percent increase.
“We are optimistic about the remainder of the year and reaffirm our updated 2014 goals outlined to investors in September,” Starling adds. “Looking ahead, we expect KCS’ long-term growth to be fueled by system-wide opportunities, which position KCS very well over the next several years.”
