KANSAS CITY, Mo. (AP) — Railroad operator Kansas City Southern said Friday it was reducing its revenue and earnings expectations for the fourth quarter as the failing economy is cutting into shipping volumes.
Company shares were down $1.19, or 6 percent, to $17.74 in midday trading Friday.
The Kansas City-based company said in a filing with the Securities and Exchange Commission that "carload and unit volumes have declined across most of KCS's commodity groups in the current quarter," and it now expected fourth-quarter revenues to be about 5 percent lower than the $460.3 million it recorded during the same period a year ago.
Analysts surveyed by Thomson Reuters are expecting fourth-quarter revenues of $495.2 million.
It added that the slowdown in revenues would also force annual revenue growth into the single-digits. Analysts have expected a 10 percent increase in annual revenue to $1.92 billion.
In addition, the company said it expected to record a negative charge to diluted earnings in the fourth quarter due to the continued weakness of the Mexican peso against the U.S. dollar, which affects the operations of its Mexican subsidiary.
The railroad said it plans to reduce capital spending and other expenditures for the first half of 2009, which it said would ensure positive free cash flow, and would possibly cut back on spending in the second half of 2009 if the economy doesn't improve.