SAN DIEGO and KANSAS CITY, Mo., May 2, 2014 /PRNewswire/ -- Shareholder rights law firm Robbins Arroyo LLP announces that an investor of Kansas City Southern (NYSE: KSU) has filed a federal securities fraud class action complaint in the U.S. District Court for the Western District of Missouri. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between October 18, 2013 and February 18, 2014 (the "Class Period"). Kansas City Southern, through its subsidiaries, engages in the freight rail transportation business extending from the Midwest and Southeast United States and into Mexico.
Kansas City Southern Is Accused of Misrepresenting Company Outlook for Fiscal 2013
According to the complaint, shares of Kansas City Southern fell on $17.79, or more than 15%, to close at $99.49 on January 24, 2014, after the company announced weaker than expected fourth quarter and fiscal results for the period ending December 31, 2014. Rather than the net income of $1.10 per share on revenues of $618.1 million for the fourth quarter that the investment community had been led by the company to expect, Kansas City Southern reported net income of $113.8 million, or $1.03 per share, on revenues of $615.6 million. Further, the company projected an earning's growth in fiscal 2014 in the mid-teens, in contrast to the 26% growth that expected by the investment community. Shares of Kansas City Southern declined an additional $4.00 to close at $91.67 on February 18, 2014, on news that the Mexican legislature had approved a bill that would open competition to the company's exclusive freight and passenger rail networks in that country.
The complaint further alleges that, during the class period, Kansas City Southern failed to disclose to investors that the company's utility coal volumes and crude oil shipments were declining, and construction of the Port Arthur crude oil terminal was being delayed. As a result, Kansas City Southern lacked a reasonable basis for their positive statements concerning the company's business, operations and earnings.
Kansas City Southern Investors Are Encouraged to Contact Shareholder Rights Law Firm Robbins Arroyo LLP
If you invested in Kansas City Southern and would like to discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the information form on the firm's shareholder rights blog: www.robbinsarroyo.com/shareholders-rights-blog/kansas-city-southern
Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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SOURCE Robbins Arroyo LLP