Kirby Corporation Reports Improved Third-Quarter Earnings
Kirby Corporation announced net earnings of $41.8 million for the third quarter, compared with $28.6 million for the same quarter a year ago. Revenues were also sharply higher, $704.8 million compared with $541.3 million a year ago.
On a per-share basis, third-quarter 2018 earnings were 70 cents per share, up from 52 cents per share a year ago.
“Overall, I am pleased with Kirby’s third-quarter results and the continued improvement in our marine transportation businesses,” said David Grzebinski, Kirby president and CEO, in the October 25 announcement. “In inland marine transportation, increasing volumes from petrochemical and black oil customers, lock closures, and refinery turnarounds all contributed to increased utilization for our tank barge fleet during the quarter. These tight market conditions prompted sequential increases in spot market rates in the mid-single digits, and term contracts continued to move higher. Overall, higher demand, pricing improvements, and lower operating and maintenance costs helped to improve inland operating margins into the mid-to high teens during the quarter.”
Kirby’s marine transportation segment generated revenues of $382 million, compared with $318.8 million for the 2017 third quarter.
In the inland market, barge utilization was in the low to mid-90 percent range during the quarter, compared to the mid-80 percent to mid-90 percent range a year ago. Operating conditions were adversely impacted by periodic closures at two locks in Louisiana as well as one on the Ohio River, the company said.
Both term contract pricing and spot market pricing improved during the quarter, with spot rates up more than 20 percent year-over-year, Kirby said.
Revenues in the inland market increased approximately 30 percent compared to the 2017 third quarter primarily due to the contribution from the Higman Marine Inc. acquisition in February, recent pressure barge acquisitions, improved pricing, increased demand, and overall higher fleet utilization, the company said.
The company reported capital expenditures during the third quarter of $78.8 million, including $8 million for new inland towboat construction, $13.4 million for progress payments on the construction of six 5,000 hp. coastal ATB tugs, $10.3 million for progress payments on a new 155,000-barrel coastal ATB under construction that was acquired from a competitor in the second quarter, and $47.1 million primarily for upgrades to existing inland and coastal fleets.
The company expects total 2018 capital spending to be in the $275 million to $290 million range.
Grzebinski said the company is projecting earnings of 55–75 cents per share for the fourth quarter, and $2.27–$2.47 per share for the full year.