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Burgeoning coal, automotive and chemical traffic helped drive up Kansas City Southern's revenue and income in the third quarter.

The company's revenue rose 6.8 percent to $444.1 million and operating income jumped 27 percent to a record $98.2 million compared with third-quarter 2006 totals. In addition, net income increased 58 percent to $41.8 million, diluted earnings per share shot up 50 percent to 48 cents and the company's operating ratio improved 3.5 points to 77.9.

Chemical and petroleum products revenue increased 12.7 percent year over year to $83.5 million as volume rose 5.3 percent to 58,188 units; coal revenue went up 16.9 percent to $50.6 million as volume increased 4.8 percent to 79,759 units; and automotive group revenue jumped 21.8 percent year over year to $29 million as volume rose 16.6 percent to 27,997 units.

Agriculture and minerals revenue increased 7 percent to $103.1 million even though traffic declined 2.2 percent to 74,154 units. However, intermodal revenue was flat at $37.4 million as volume dropped 6.5 percent to 134,869 units compared with third-quarter 2006's total.

Quarterly operating expenses totaled $345.9 million, a 2.2 percent increase compared with third-quarter 2006's expenses primarily because of higher compensation and benefits, materials, and casualties and insurance costs.

"Within the context of a slower-than-expected economy, we are encouraged by the overall improvement in our operating performance," said KCS Chairman and Chief Executive Officer Mike Haverty in a prepared statement. "The company is focused on achieving the revenue growth and expense controls necessary to meet our target of an operating ratio below 80 for the year."

Meanwhile, KCS also announced plans to apply for U.S. and Mexican permits next year to build a new international rail bridge over the Rio Grande River southeast of Laredo, Texas. The company recently contracted TranSystems Corp. to conduct preliminary engineering work.

Located along the Texas Department of Transportation's proposed East Loop Bypass Corridor, the bridge would eliminate international through-traffic from downtown Laredo and Nuevo Laredo, Mexico, and retain rail connections to three yards: Union Pacific Railroad's Port Laredo facility, The Texas Mexican Railway Co.'s Laredo yard and Kansas City Southern de México S.A. de C.V.'s Sanchez facility. The project also would free up right of way through Laredo and Nuevo Laredo for other purposes, such as a commuter-rail corridor between the United States and Mexico.