NEW YORK, April 18, 2014 /PRNewswire/ -- Pomerantz LLP
is investigating claims on behalf of investors of Kansas City
Southern ("KCS" or the "Company") (NYSE: KSU). Investors are
advised to contact Robert S.
Willoughby at rswilloughby@pomlaw.com or 888-476-6529, ext.
237.
The investigation concerns whether KCS and certain of its
officers and/or directors have violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934.
On January 22, 2013, the Company
issued a release announcing its fourth quarter and 2012 financial
results. Later that day, the Company officers conducted an earnings
conference call on behalf of the Company during which, in addition
to discussing the Company's fiscal and fourth quarter 2012 results,
they provided fiscal 2013 guidance that – if met – would convince
the rating agencies to upgrade the Company's corporate debt ratings
to investment grade. The market reacted positively to the
news. As reported by Reuters that evening, the Company "forecast
2013 revenue growth in the high-single digits" and on this news,
"[s]hares of Kansas City Southern, which have risen about 30
percent since the beginning of 2012, closed up nearly 5 percent at
an all-time high of $91.67 on
Tuesday."
On January 24, 2014, KCS issued a
press release announcing its fourth quarter and fiscal 2013
financial results. The Company's reported fourth quarter and fiscal
2013 net income significantly missed the net income the investment
community had been led to expect based on defendants' Class Period
statements. The Company also offered a disappointing earnings
growth outlook for fiscal 2014, forecasting per-share earnings for
2014 to rise only in the mid-teens, while the investment community
had been led to expect 26% growth based on defendants' Class Period
statements.
On this news, the price of KCS common stock declined
$17.79 per share, or more than
15.17%, to close at $99.49, on
unusually heavy trading volume, on January
24, 2014.
KCS operates its Mexican railroad under a 1997 concession from
the Mexican government that purportedly extended to 2027 (the
"Concession"). According to the Concession, KCS had the exclusive
right to use, but did not own, all tracks and buildings necessary
for its Mexican operation. KCS was obligated to maintain the right
of way, track structure, buildings and related maintenance
facilities to the operational standards specified in the Concession
and to return the assets in that condition at the end of the
Concession period.
On February 18, 2014, the market
learned that the lower house of the Mexican legislature had
approved a new bill to increase rail competition in Mexico by giving third-party companies access
to KCS's exclusive freight and passenger rail networks, and to give
the government control over tariffs. According to a Bloomberg
news report, KCS obtained approximately 46% of its 2013 revenues
from Mexican operations.
On this news, the price of KCS stock fell $4.29 per share, or more than 4.47%, on close at
$91.67 on February 18, 2014.
The Pomerantz Firm, with offices in New York, Chicago, San
Diego and Florida, is
acknowledged as one of the premier firms in the areas of corporate,
securities, and antitrust class litigation. Founded by the late
Abraham L. Pomerantz, known as the
dean of the class action bar, the Pomerantz Firm pioneered the
field of securities class actions. Today, more than 70 years later,
the Pomerantz Firm continues in the tradition he established,
fighting for the rights of the victims of securities fraud,
breaches of fiduciary duty, and corporate misconduct. The Firm has
recovered numerous multimillion-dollar damages awards on behalf of
class members. See www.pomerantzlaw.com.
CONTACT:
Robert S.
Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
SOURCE Pomerantz LLP