Shares of Kansas City Southern slumped 1.1% in premarket trading Tuesday, after the railroad operator reported third-quarter profit that fell short of expectations, as auto plant shutdowns resulting semiconductor shortages, service interruptions from right-of-way blockages and increased regulation of shipments into Mexico led to a 3% decline in carload volumes. Net income fell to $156.1 million, or $1.71 a share, from $189.7 million, or $1.01 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share came to $2.02, below the FactSet consensus of $2.04. Revenue rose 12.8% to $744.0 million, above the FactSet consensus of $722.4 million. Operating expenses increased 26.8% to $492.1 million, including a 13.5% rise in compensation and benefits costs to $133.3 million and a 53.5% jump in fuel costs to $78.0 million. “We are encouraged that despite several commercial headwinds, our network is performing extremely well and we are delivering near record velocity and dwell,” said Chief Executive Patrick Ottensmeyer. The stock has rallied 13.1% over the past three months through Monday, while the Dow Jones Transportation Average has advanced 7.1% and the Dow Jones Industrial Average has tacked on 3.8%.
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