KSU - Kansas City Southern - Three analysts have raised their estimates for this year

The company has dramatically exceeded earnings estimates in each of the past four quarters. The average surprise has been over 30%. Three analysts have raised their estimates for this year. Over the past 60 days, this year's estimates have increased 20 cents to $1.40 per share. Analysts expect the company to earn $1.80 per share next year. Full Analysis Kansas City Southern (KSU), through its various subsidiaries and alliances, provides rail transportation services over a network of more than 25,000 route miles across the U.S., Canada, and Mexico. The company's principal subsidiary is wholly owned Kansas City Southern Railway Company (KCSR). KCSR serves a ten-state region in the Midwest and southern parts of the U.S. and has the shortest north/south rail route between Kansas City, Missouri and several key ports along the Gulf of Mexico in Alabama, Louisiana, Mississippi, and Texas. KSU owns all of the stock of Kansas City Southern de Mexico, S.A. de C.V. (KCSM). KCSM operates a primary commercial corridor of the Mexican railroad system and serves most of Mexico's principal industrial cities and three of its major shipping ports. Zacks Equity Research Analyst Ann Hefron, CFA sees the potential for additional improvement in the operating margin on the back of rising freight volumes, higher fuel surcharges (fuel surchage coverage is roughly 88%), and continued strength in pricing, driven by tight rail and trucking capacity. Other efforts that should lead to improved margins include upgrading the locomotive fleet to newer more fuel-efficient locomotives, improved fuel utilization, and continued integration of operations and shared services that will lead to cost take-outs. Moreover, the new business pipeline continues solid, with significant strength in agriculture, chemical, coal and intermodal. Earnings are also expected to benefit further from a reduction in the corporate tax rate in Mexico and the refinancing of $618 million of high yield debt, which will save roughly $15 million in annual interest costs. The company has dramatically exceeded earnings estimates in each of the past four quarters. The average surprise has been over 30%. Three analysts have raised their estimates for this year. Over the past 60 days, this year's estimates have increased 20 cents to $1.40 per share. Analysts expect the company to earn $1.80 per share next year. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home