Kirby: Inland Revenues, Margins Up In First Quarter

Kirby Corporation Inc. reported strong inland marine revenues and margins and “improved market fundamentals” in marine transportation in its report on first-quarter earnings. The positive first quarter came despite some adverse weather conditions, with full barge utilization and strong customer demand expected to continue.

Kirby also reported the acquisition of 14 barges, including four specialty barges, and four high horsepower boats from an undisclosed seller for $97.3 million.

In a May 1 statement, Kirby CEO David Grzebinski said, “We’re off to a solid start in 2025. While recent macro events have created some near-term uncertainty in places, we continue to see favorable fundamentals as 2025 progresses. Our balance sheet is strong, and we expect to generate significant free cash flow despite high levels of capital expenditures this year, and absent meaningful acquisitions, we expect to use the majority of free cash flow for share repurchases. We see favorable markets continuing and expect our businesses will produce improving financial results as we move through this year.”

In the inland marine sector, Grzebinski said he anticipates positive market dynamics due to limited new barge construction.

“We expect our barge utilization rates to be in the low to mid-90 percent range for the year with continued improvement in term contract pricing as renewals occur throughout the year,” he said.

Grzebinski said inflationary pressures and a shortage of mariners continue to have an impact.

“These pressures, along with the increasing cost of equipment, should continue to put upward pressure on spot and contract prices,” he said.

In a question-and-answer period, Grzebinski said that the mariner shortage is as much of a constraint on new barge construction as the high cost of steel or financing. “The mariner shortage makes barge expansion a challenge,” he said. In response to a question about tariffs, Grzebinski cautioned that, while the effect of tariffs could not be predicted, so far they have had little impact on Kirby’s business.

“Onshoring is great for Kirby, because we’re 100 percent domestic,” he said. “All tariff effects taken together may be a small net positive for us.”

One questioner asked Grzebinski about efforts in Congress and a recent executive order to revitalize American shipbuilding. He said those efforts seem to be directed at international shipbuilding rather than the Jones Act fleet. He said the inland side could get some benefits from incentives to train and recruit mariners.

Overall, he said, Kirby’s inland revenues are expected to grow in the mid to high single-digit range for the full year.

“With the caveat that we are assuming little to no recessionary impacts from tariffs, we expect operating margins will gradually improve during the year from the first quarter levels and average 200-300 basis points higher for the full year,” he said.

In the first quarter ending March 31, Kirby announced earnings of $76 million or $1.33 per share, compared with earnings of $70.1 million, or $1.19 per share for the 2024 first quarter. Consolidated revenues for the 2025 first quarter were $785.7 million, compared with $808 million reported for the 2024 first quarter.

In its first quarter report for its coastal marine operations, Kirby said it expects barge utilization rates in the mid-90 percent range. Revenues for the entire year are expected to grow in the high-single- to low-double-digit range compared to 2024. Coastal operating margins are forecast to improve to the “mid-teens range on a full-year basis,” the company stated.

Kirby said it expects to generate net cash provided from operating activities of $620 million to $720 million in 2025, and capital spending is expected to range between $280 million and $320 million. Approximately $180 million to $220 million is associated with marine maintenance capital and improvements to existing inland and coastal marine equipment and facility improvements. Up to approximately $100 million is associated with growth capital spending in both businesses.

A replay of the report webcast will be available for one year on the investor relations section of Kirby’s website, www.kirbycorp.com.