Kansas City Southern Industries Inc.'s earnings plunged 75 percent in the first quarter, largely due to a drop in profits from its Mexican affiliate, the railway reported.

Kansas City Southern reported income of $3.4 million, or 2 cents a share, during the January-March period, compared with earnings of $13.6 million, or 22 cents a share, during the first quarter of 2003.

The Kansas City-based company reported revenues of $147.8 million, up from $140.2 million in the first quarter of 2003.

It blamed the earnings drop on debt retirement costs, higher taxes and lower profits from Grupo TFM SA, a Mexican railway it partly owns.

Michael R. Haverty, Kansas City Southern's chairman, president and chief executive officer, said the decreased contribution from Grupo TFM was a result of deferred taxes and the weakness of the Mexican peso versus the U.S. dollar.

"We are encouraged that TFM's business strengthened toward the end of the quarter, and that it has successfully brought on new business to replace that temporary lost because of a weak North American automobile market," Haverty said.

Shares of Kansas City Southern were up 4 cents at $13.98 in trading Thursday morning on the New York Stock Exchange.