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Similar to the other Class Is, Kansas City Southern took “positive business momentum” generated in the third quarter and carried it into and through the fourth quarter.

Today, KCS reported quarterly revenue of $406.8 million, down 4 percent vs. fourth-quarter 2008 but up 5 percent vs. third-quarter 2009. In addition, operating income rose 1 percent to $91.9 million, operating expenses dropped 5 percent to $314.9 million and KCS’ operating ratio improved 1.1 points to 77.4. Volume slipped 1 percent year over year to 436,500 units, but increased 3 percent compared with third-quarter carloads.

“Particularly gratifying was the significant pick up of [Kansas City Southern de México S.A. de C.V.’s] traffic,” said KCS Chairman Mike Haverty in a prepared statement. “Given its importance in terms of North American manufacturing, the business upswing in Mexico, which has continued into the early weeks of 2010, suggests that the economy is gradually gaining momentum.”

Among the few downbeats in the quarter, compensation and benefit expenses rose from $78.6 million in the year-ago period to $88.3 million, and diluted earning per share fell from 40 cents to 33 cents. But analysts had expected earnings of 29 cents per share and revenue of $397.2 million, according to Thomson Reuters.

For the full year, revenue dropped 20 percent to $1.5 billion, carloads declined 11 percent to 1.6 million units, operating income fell 31 percent to $268.2 million, operating expenses decreased 17 percent to $1.2 billion and KCS’ operating ratio rose 3 points to 81.9 compared with 2008 figures.

“KCS management is cautiously optimistic that the company will be able to maintain the positive volume and revenue growth momentum that it experienced in the second half of last year throughout 2010,” said Haverty. “A continued strong pricing environment, new and renewed business contracts and the growth of our cross-border intermodal product, including the introduction of six-day service between central Mexico and Atlanta, will be important catalysts in KCS’ rebound.”