U.S. railroad Kansas City Southern reported first-quarter profits that were slightly higher than expected, with increased revenues driven by its automotive and intermodal business.

Those two sectors are the company's biggest growth engines, it said on a conference call, adding that supply chain disruptions caused by Japan's March earthquake will not have a major impact on its business this year.

Mexico, where the fourth-largest publicly held U.S. railroad generates nearly half of its revenue, presents a growing opportunity. There will be more cross-border traffic, and a shift by some companies into Mexico from Asia as business costs in China rise, the company told analysts.

"KCS is currently talking to a number of Asian-based companies who are looking to locate facilities in Mexico," CEO David Starling said on the call.

"Will we get them all? Probably not. But we will get our share, and that will keep us at our accelerated pace, not only in the near future but out over an extended period," he said.

The company's international holdings include Kansas City Southern de Mexico, a primary Mexican rail line that connects the United States and Mexico.

Kansas City Southern shares gained 4.1 percent to $54.09 in later morning trade on the New York Stock Exchange. The shares are up nearly 14 percent this year, more than triple the gain in the Dow Jones Transportation Average.

More than half of its revenue growth in the next two to three years will come from new business, Pat Ottensmeyer, executive vice president of sales and marketing said.

Four auto manufacturers are looking for sites in Mexico, the company said on the call, auguring well for the railroad's cross-border traffic.

The Kansas City, Missouri-based company posted first-quarter net income of $63 million, or 58 cents a share, compared with $33 million, or 34 cents per share, a year before.

Analysts, on average, had expected earnings of 57 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose 12 percent to $489 million, beating the $482.7 million average forecast. A year ago, revenue was $436.3 million.

Carload volumes increased 7 percent. Core prices were up 5.6 percent and seen maintaining mid single-digit increases this year, the company said.

The two largest U.S. publicly held railroads -- Union Pacific and CSX Corp reported on Wednesday similar volume and pricing gains and outlooks despite disruptive winter storms and fuel price spikes. (Reuters)