Kansas City Southern Earnings Preview

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Investors hope Kansas City Southern (NYS: KSU) will top analyst estimates once again after beating predictions by $0.03 in the previous quarter. The company will unveil its latest earnings on Monday. Kansas City Southern is engaged in domestic and international rail operations in North America that are focused on the growing north/south freight corridor connecting commercial and industrial markets in the Central U.S.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Kansas City Southern, with 11 of 16 rating it a buy and the remainder rating it a hold. Analysts like Kansas City Southern better than competitor Canadian Pacific Railway overall. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $549.2 million in revenue this quarter. That would represent a rise of 14.7% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.79 per share. Estimates range from $0.77 to $0.83.

What our community says:
CAPS All-Stars are solidly backing the stock with 98.1% giving it an outperform rating. The community at large concurs with the All-Stars with 96.4% assigning it a rating of outperform. Fools are bullish on Kansas City Southern and haven't been shy with their opinions lately, logging 156 posts in the past 30 days. Even with a robust four out of five stars, Kansas City Southern's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Kansas City Southern's profit has risen year over year by an average of 97.4% over the past five quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q3

Q2

Q1

Q4

Gross Margin

57.6%

56.4%

56.1%

53.8%

Operating Margin

33.4%

28.3%

26.2%

28.2%

Net Margin

18.3%

13.2%

13.1%

11.4%

One final thing: If you want to keep tabs on Kansas City Southern movements, and for more analysis on the company, make sure you add it to your watchlist.

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Earnings estimates provided by Zacks.

At the time this article was published

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