Skip to Content
Global News Select

Kansas City Southern Swings to 2Q Loss on Deal Termination Fee

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)

Copyright (c) 2021 Dow Jones & Company, Inc.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.