Kansas City Southern Swings to 2Q Loss on Deal Termination Fee
July 16 2021 - 7:31AM
Dow Jones News
By Dave Sebastian
Kansas City Southern said it swung to a loss for the second
quarter as it paid a $700 million termination fee for its scrapped
deal with Canadian Pacific Railway Ltd.
The railroad on Friday post ed a net loss attributable to the
company of $378.5 million, compared with a profit of $109.7 million
in the prior year. It reported a loss of $4.17 a share, compared
with a profit of $1.16 a share in the same period last year.
Adjusted earnings were $2.06 a share. Analysts polled by FactSet
were expecting $2.15 a share.
Revenue rose to $749.5 million from $547.9 million due to higher
volumes, higher fuel surcharges and the strengthening of the
Mexican peso against the U.S. dollar, the company said. Analysts
were looking for $750.6 million.
The company said it will put to shareholder vote the proposed
combination with Canadian National Railway Co. on Aug. 19. The $700
million reimbursement from Canadian National will be recognized
upon the shareholder vote, Kansas City Southern said.
Chief Executive Patrick Ottensmeyer said the company has
deployed additional assets and crews to support service
recovery.
"Although we are pleased with the strong volume growth, we fell
short of our own expectations for customer service," Mr.
Ottensmeyer said.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
July 16, 2021 08:29 ET (12:29 GMT)
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