The CEO of Kansas City Southern told CNBC on Friday that he sees the company’s recovery from coronavirus business situations continue for the rest of 2020, an optimistic sign for the broader US economy.
The railroad operator reported third-quarter earnings earlier in the day, posting revenue of $ 660 million, missing Wall Street estimates of $ 663 million. However, Kansas City Southern’s earnings per share were Share of $ 1.96 excl. Goods better than the profit per. Stock of $ 1
“Across our industrial and consumer economics, we believe it will continue to be modestly strong from this point in time through the year,” CEO Patrick Ottensmeyer said of “Closing Bell.”
Kansas City Southern also raised its full annual guidance on Friday, saying it expects earnings per capita. Shares will be slightly higher on an annual basis. The company’s shares closed 2.72% on Friday at $ 179 per share. PCS. The stock has increased by almost 17% this year.
In the third quarter, the volume decreased by 4% compared to the previous year. But it is improving, Ottensmeyer said. “We are a bit up from last year and definitely above the levels before Covid,” he said.
A Kansas City Southern (KSC) railroad locomotive passes through Knoche Yard in Kansas City, Missouri, on Tuesday, January 7, 2020.
Whitney Curtis | Bloomberg | Getty Images
Railway operators, with their exposure to several different industries, are often seen as bellwethers for the economy. The United States has added millions of jobs back in recent months following sharp cuts in employment from the pandemic, and sectors such as housing have seen impressive strength. However, there are now questions about opposition to the recovery, especially as Congress has not been able to agree on a new stimulus round.
Ottensmeyer said Kansas City South’s strongest segment has been refined oil products, driven primarily by the relocation of fuel from Gulf Coast refineries to Mexico. The company has also experienced strength in its automotive industry, he said when the automotive industry recovered from the coronavirus slowdown.
On the other hand, Ottensmeyer said Kansas City Southern has seen weakness in its intermodal volumes, which involve multiple modes of transportation. He said that they are lagging behind the industry there, and “it has to do with some disruptions in service, some problems going on in Mexico that we are trying to tackle have caused us to lose some business, at least for some time. . “
Overall, Kansas City Southern has seen an “incredible” V-shaped recovery in its pandemic low-volume shipping volumes, according to Ottensmeyer. He said the last few months have been like a roller coaster ride, “if you think about the things we needed, without knowing what was ahead, with volumes falling so fast and dramatically in the second quarter and then jumping back 90 days later. “