Regional railroad operator Kansas City Southern on Thursday said its third-quarter profits tumbled on lower shipments but it still beat Wall Street expectations and said business was showing signs of recovery.
Kansas City Southern operates in the Midwest and is one of the main railroad operators in Mexico.
During a conference call with analysts, Chairman and CEO Michael Haverty said the company expected a middle single-digit improvement in carloadings in the fourth quarter.
"Mexico has really picked up in this quarter and the U.S. is doing better," Haverty said, adding that the company has worked to control costs, cutting operating expenses in the third quarter by 21 percent, largely through lower fuel costs.
The company reported earning $25.8 million, or 27 cents per share, in the July-September period, down from $48.9 million, or 52 cents per share, a year ago.
Analysts surveyed by Thomson Reuters had expected earnings of 24 cents per share.
Revenue declined 21 percent to $386.1 million from $491.5 million a year ago and below analysts' expectations of $392.5 million.
The company said total carloads decreased 9 percent during the three-month period, reflecting an industrywide slowdown.
The overall decline included a 35 percent drop in automotive loadings, 17 percent slide in agriculture and 30 percent decline in industrial and consumer products. Shipments of petroleum and chemicals rose 8 percent while coal shipments were flat.
But compared with the second quarter, third quarter revenue rose 13 percent while total carloads advanced 12 percent.
After falling as low as $22.58 early in the session, the railroad's shares were up a penny at $24.60 in afternoon trading.
