Kirby reported higher third-quarter earnings and revenue, with growth in both marine transportation and distribution and services. The Houston-based marine and industrial services company also raised its full-year earnings-growth outlook, announced a $115 million inland marine asset purchase and said it returned $112 million to shareholders through share repurchases during the quarter.
Net earnings were $110.8 million, or $2.09 per share, for the three months ended Sept. 30, compared with $92.5 million, or $1.65 per share, a year earlier. Revenue rose to $977.2 million from $871.2 million.
Key details
- Marine transportation grew: Revenue increased 17% to $568.7 million, while operating income rose to $111.9 million from $88.6 million. The operating margin improved to 20% from 18%.
- Inland marine demand and pricing strengthened: Barge utilization was in the low-90% range. Spot rates rose sequentially by a low- to mid-single-digit percentage, and contract renewals were up by a low-single-digit percentage from a year earlier. Strong refinery operations and petrochemical activity, along with limited industry capacity additions, supported results.
- Fuel costs remained a headwind: Kirby said cost escalators and rate-recovery mechanisms offset some, but not all, of the quarter’s higher fuel expenses.
- Coastal marine remained highly utilized: Utilization was in the high-90% range, and revenue increased slightly year over year. A third-quarter contract renewal brought a low-double-digit rate increase, while operating margins were in the mid-teens amid market-specific conditions and cost pressures.
- Distribution and services revenue rose 6%: Growth was driven by demand for behind-the-meter and backup power-generation solutions, alongside a healthy commercial and industrial market.
- Kirby agreed to buy inland marine assets for $115 million: The assets include nine towboats, 14 tank barges, nine bow thrusters and a fleeting operation serving the Corpus Christi area. The sellers were not identified. No closing date was provided in the announcement.
- Share repurchases totaled $112 million during the quarter.
- Full-year outlook: Kirby set its expected full-year earnings-per-share growth at 10% to 15%, based on its current outlook.
What changes
Kirby’s latest results show improved earnings and margins in marine transportation, with high utilization in both inland and coastal operations. The planned asset purchase would add vessels and a Corpus Christi-area fleeting operation to its inland marine business. The company also returned capital through buybacks while maintaining a full-year earnings-growth outlook of 10% to 15%.