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.
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(END) Dow Jones Newswires