EyeCatching Stock: Kansas City Southern (KSU)

Kansas City Southern (NYSE:KSU) reported earnings for the three months ended Mar2016 on April 19, 2016. The company earned $1.03 per share on revenue of $562.7M. Analysts had been modeling earning per share of $0.97 with $566.22M in revenue.

Kansas City Southern (KSU) on April 19, 2016 reported first quarter 2016 revenues of $563 million. 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.

Operating expenses in the first quarter were $375 million, 12% lower than 2015. Excluding the estimated impacts of Mexican peso depreciation and lower U.S. fuel prices, 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 KCS Chief Executive Officer David L. Starling. “That we overcame this very significant challenge while simultaneously scaling costs across the network clearly demonstrates KCS’ ability to react quickly to rapid and unexpected changes to its operating environment.”

Kansas City Southern earnings per share showed a decreasing trend of -3.3% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 523%.Analysts project EPS growth over the next 5 years at 8.57%. It has EPS annual growth over the past 5 fiscal years of 3.5% when sales grew 5.9. It reported -6.7% sales drop, and 9.2% EPS growth in the last quarter.

The stock is trading at $93.1, up 50.27% from 52-week low of $62.2. The stock trades down -6.93% from its peak of $101.24 and 5.64% above the consensus price target of $98.35. Its volume clocked up at 1.16 million shares which is lower than the average volume of 1.46 million shares. Its market capitalization currently stands at $10.08B.