Kansas City Southern Industries Inc. said it plans to split its railroad and mutual funds businesses to concentrate on the faster-growing financial-services unit.
The Kansas City-based company also said third-quarter earnings will be at least 35 percent higher than analysts had expected.
The company, which manages about $71.3 billion through its Janus Capital Corp. and Berger Associates Inc. mutual fund groups, joins other U.S. businesses that announced overhauls this week to please investors and boost profits.
While it “has been the leading-performing stock among the railroads,” said Douglas Rockel, an analyst at Furman Selz LLC in New York, “splitting the company will make it easier for investors to understand its value.”
Kansas City Southern didn’t say how it will separate the railroad and fund businesses, although the transaction will take place before the end of the year and be arranged to preserve the company’s ability to raise money and to avoid lowering its credit ratings.
The company is also considering a public offering of the transportation unit, said Joseph Monello, the firm’s chief financial officer.
