OREANDA-NEWS. Kansas City Southern (KCS) (NYSE:KSU) reported record fourth quarter 2014 revenues of USD 643 million. Overall, carload volumes were 5% higher than in fourth quarter 2013.

Compared to 2013, fourth quarter revenue growth was led by a 13% increase in Automotive and a 9% increase in both Chemicals & Petroleum and Energy. Intermodal was also strong, with revenues growing by 8% in the fourth quarter of 2014. Industrial & Consumer revenue grew 1% and Agriculture & Minerals revenue declined by 5% compared to the prior year, primarily due to a decline in grain shipments when compared to the exceptionally strong fourth quarter of 2013. Also, the impact of lower U.S. fuel prices and the depreciating peso reduced revenue growth by approximately 2% compared to the fourth quarter of 2013.

Operating income for the fourth quarter of 2014 was USD 214 million compared with USD 196 million a year ago, a 9% increase. KCS reported a fourth quarter 2014 operating ratio of 66.7%, a 1.4 point improvement from fourth quarter 2013. Operating expenses in the fourth quarter were USD 429 million compared with USD 420 million in the corresponding 2013 period, a 2% increase.

Reported net income in the fourth quarter of 2014 totaled USD 142 million, or USD 1.28 per diluted share, compared with USD 114 million, or USD 1.03 per diluted share, in the fourth quarter of 2013. Excluding debt retirement costs and the impacts of foreign exchange rate fluctuations, adjusted diluted earnings per share for fourth quarter 2014 was USD 1.27 compared to USD 1.03 in 2013. The adjusted effective income tax rate in the fourth quarter of 2014 was 30.2% compared to 37.0% in the fourth quarter of 2013.

For the full year of 2014, revenue was a record USD 2.6 billion, up 9% over 2013. Carloads for 2014 were 2.3 million, an increase of 5% over the prior year.

After adjusting for lease termination costs, full-year operating income was USD 847 million. Full-year 2014 adjusted operating income increased 15% over prior year's operating income. The Company's 2014 adjusted operating ratio was 67.1% compared with the operating ratio of 68.8% in 2013, a 1.7 point improvement.

Reported net income in 2014 totaled USD 504 million, or USD 4.55 per diluted share, compared with USD 353 million, or USD 3.18 per diluted share, in 2013. Excluding lease termination and debt retirement costs and the impacts of foreign exchange rate fluctuations, adjusted diluted earnings per share for 2014 was USD 4.82 compared to USD 3.98 in 2013. The adjusted effective income tax rate for 2014 was 32.6% compared to 34.7% in 2013.

"Kansas City Southern achieved record financial results with growth in all six commodity groups in 2014" stated President and Chief Executive Officer David L. Starling. "Strong volume growth in our Agriculture & Minerals and Automotive commodity groups contributed to a record adjusted operating ratio of 67.1%, a reduction of 1.7 points over the prior year's operating ratio.

"KCS met its stated target of high-single digit year-over-year revenue growth, coming in 9% higher than 2013. The Company reported adjusted diluted earnings per share of USD 4.82, which marks the fifth consecutive year KCS has recorded a double-digit percentage increase in its adjusted diluted earnings per share.

"Looking ahead to 2015, we believe KCS is well-positioned to maintain its growth momentum driven by a strengthening economy and unique franchise opportunities. We expect to see positive developments in a wide-range of commodity groups, including automotive, intermodal, and chemical & petroleum products. And, while there is significant volatility in the energy markets, KCS anticipates volume growth in crude oil traffic originating in Canada and terminating at various Gulf locations. These exciting growth areas provide visibility to continued growth over the next decade."