KSU Kansas City Southern

Kansas City Southern said its second-quarter earnings rose 7.4% as the company benefited from improved trends in freight volume for certain commodities.

The Kansas City, Mo., company operates railroads in the Midwest and Mexico that run north to south, in contrast to the majority of other railroads, which run east to west.

Kansas City Southern, like other railroad operators, has been cutting costs in an effort to offset weak freight volume.

"On balance, we were pleased with our second quarter 2016 results, particularly with the positive volume trend experienced during late May and the entire month of June," the company's new chief executive, Patrick J. Ottensmeyer, said in prepared remarks.

Carload volume increased 2% in June and ended unchanged for the quarter, mostly from continued good performance in its chemical and petroleum segment and its agriculture and minerals business, and a strengthening in automotive late in the quarter, Mr. Ottensmeyer stated.

For the year-earlier period, North America's No. 4 railroad by revenues had reported a carload volume decline of 6%.

Among the commodity groups with lower volume, energy segment carload volume dropped 5% in the latest quarter, including a 1% decline in coal volume. A year earlier, energy segment volume fell 29%, including a 43% decline in coal shipments.

Over all, KSU reported a profit of $120.1 million, or $1.11 a share, up from $111.8 million, or $1.01 a share, a year earlier. Excluding foreign-exchange rate fluctuations and other items, adjusted per-share earnings rose to $1.22 from $1.03. Revenue decreased 3% to $568.5 million.

Analysts polled by Thomson Reuters expected per-share profit of $1.03 and revenue of $573 million.

Operating expenses fell to 13% from a year earlier.

On April 11, Canadian Pacific Railway called off its nearly $30 billion pursuit of Norfolk Southern after it was unable to overcome a wall of opposition from rival railroads, shippers and U.S. politicians.

CSX Corp. last week reported its second-quarter revenue fell 12% as coal shipments slimped 30%. Union Pacific Corp. plans to release its results on Thursday and Norfolk Southern Corp. is expected report earnings July 27.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

July 19, 2016 09:15 ET (13:15 GMT)

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