Image source: Kansas City Southern.

What: Shares of rail company Kansas City Southern (NYSE:KSU) jumped 10.9% in April after the company reported better-than-expected earnings, despite weak energy demand.

So what: First-quarter 2016 revenue fell 6.7%, to $562.7 million, but cost-cutting measures helped the bottom line. Net income was up 6.9%, to $107.8 million, or $0.99 per share, $0.02 ahead of expectations. 

There's no doubt that weak demand in energy is hurting Kansas City Southern, with coal volume down 22%, and frac sand shipments off 42%. But management has been able to cut costs enough to overcome the lost revenue, and that bodes well for the company if energy demand picks up again.

Now what: I don't think we can expect growth in energy demand, particularly in the coal market, for quite a while; but the fact that Kansas City Southern is posting a nice profit in a rough macro environment is great for investors. With shares trading at 18 times forward earnings, and the stock yielding 1.4% from a dividend, there's definitely value there. I'd be cautious expecting a big operational turnaround in 2016, but we could see a pickup in performance if the shale market has hit bottom, and oil prices pick up in future years. Both events would really help the stock.