Lower revenue, Mexico problems hurt Kansas City Southern profit

Regional U.S. railroad Kansas City Southern (KSU.N) on Tuesday reported a worse-than-expected quarterly net profit, weighed by falling freight volumes and disruptions stemming from anti-government protests in Mexico.

The railroad said that revenue in the third quarter was down 4 percent versus the same period in 2015.

The company saw revenue from its automotive business down 6 percent and revenue from intermodal, or consumer goods shipments, fall 7 percent, largely due to the Mexican service interruptions.

The company said that had it not been for the U.S. dollar strengthening versus the Mexican peso, its revenue would have only fallen 1 percent in the quarter.

Kansas City Southern's revenue from its energy-related business also fell by 15 percent as reduced U.S. drilling operations in North Dakota resulted in lower crude oil and frac sand shipments.

The Kansas City-based company reported net income for the third quarter of $120.3 million or $1.12 per share, down more than 7 percent from $132.9 million or $1.21 per share a year earlier. Analysts had on average expected earnings per share for the quarter of $1.18.

Revenue in the quarter was $604.5 million, down from $631.9 million. Analysts had expected earnings per share of $602.7 million.

In late July, anti-government protests blocked Kansas City Southern tracks and those of other railroads in Mexico, causing service disruptions.