Markets News

UPDATE 1-Kansas City Southern revenue misses estimates as COVID-19 hits shipments

(Compares with estimates, adds 2020 operating ratio forecast, shares)

Oct 16 (Reuters) - U.S. railroad operator Kansas City Southern’s quarterly revenue missed Wall Street estimates on Friday, as shipment volumes fell due to a pandemic-induced fall in service demand.

The company, which withdrew its full-year earnings forecast in April on coronavirus concerns, said it now expects 2020 adjusted operating ratio to be at the lower end of the 60% to 61% range. The company’s operating ratio was 63.2% in 2019.

Kansas City Southern last month rejected a $20 billion takeover offer from an investor group, according to a report from the Wall Street Journal. The deal was for $208 a share, which the railroad said undervalued the firm.

Kansas City Southern said total carload volumes were down 4% from a year earlier, mainly due to lower frac sand and crude oil shipments.

Net income rose to $190.2 million, or $2.01 per share, in the third quarter ended Sept.30, from $180.6 million, or $1.81 per share, a year earlier.

Revenue fell about 12% to $659.6 million, below estimates of $662.7 million, according to Refinitiv data.

Excluding items, the company earned $1.96 per share, topping analysts’ average estimate of $1.90 per share.

Shares fell about 1% to $182.50 in premarket trade. (Reporting by Sanjana Shivdas in Bengaluru; Editing by Vinay Dwivedi)