April 27, 2006
Kirby announces record earnings
Kirby Corporation (NYSE: KEX) has announced record net earnings for the first quarter ended March 31, 2006 of $22,580,000, or $.85 per share, compared with net earnings of $13,279,000, or $.52 per share, for the 2005 first quarter.
President and CEO Joe Pyne also announced that the company is increasing its capital spending guidance for 2006 by $10 million to the $120 to $130 million range due to anticipated capital spending on the four ocean- going dry cargo barge and tug units which were acquired with the purchase of the remaining 65% interest in Dixie Fuels Limited in March 2006.
"The capital spending guidance range includes approximately $50 million for the construction of 23 tank barges, each with a capacity of 30,000 barrels, and four towboats," said Pine.
Consolidated revenues for the 2006 first quarter were a record $224,903,000, an increase of 22% over $184,444,000 reported for the 2005 first quarter.
On April 25, 2006, the Board of Directors declared a two-for-one stock split of Kirby's common stock. Stockholders of record on May 10, 2006 will receive one additional share of common stock for each share of common stock held on that day. The additional shares will be distributed on May 31, 2006.
Revenues for the marine transportation segment for the 2006 first quarter increased 20% and operating income increased 46% compared with the first quarter of 2005.
The higher results reflected continued strong petrochemical and black oil demand, unusually favorable first quarter winter weather conditions, a favorable fuel pricing trend, and the impact of contract rate increases during 2005 and in the 2006 first quarter, as well as higher spot market prices.
The marine transportation operating margin for the 2006 first quarter was 18.4% compared with 15.2% for the 2005 first quarter.
The diesel engine services segment for the 2006 first quarter reported 30% higher revenues and operating income increased 66% compared with the corresponding 2005 quarter. The higher results reflected strong in-house and in-field service activity and direct parts sales in the majority of its markets. The U.S. Gulf Coast, Great Lakes and East Coast marine markets, the offshore oil service market and the power generation market all reflected improved activity. In addition, the segment benefited from higher service rates and parts pricing implemented during 2005 and in the 2006 first quarter. The operating margin for the 2006 first quarter was 16.2% compared with 12.7% for the 2005 first quarter.
"During the 2006 first quarter," noted Pine, "we experienced unusually favorable winter weather conditions, with delay days down 25% when compared with the 2005 first quarter. Ton miles were up slightly compared with the first quarter of 2005, but product mix, contract and spot rate increases, and fuel cost recovery during the first quarter, resulted in strong growth in marine transportation revenue and operating income."
Commenting on the 2006 second quarter market conditions and guidance, Mr. Pyne said, "We anticipate our marine transportation business levels will remain strong, with some normal seasonal improvement in our upriver refined products and agricultural chemical markets. Our earnings guidance includes vessel personnel wage increases effective April 1, 2006. We do not anticipate favorable fuel pricing which benefited our first quarter results. We anticipate our diesel engine services segment to remain strong, however, not as strong as the first quarter which included seasonal work for Midwest and Great Lakes marine customers. For the 2006 second quarter, our earnings per share guidance is $.85 to $.90, compared with $.72 per share reported for the 2005 second quarter. For the 2006 year, we increased our guidance to $3.35 to $3.50 per share from previous guidance of $2.95 to $3.15 per share. This guidance compares with 2005 net earnings of $2.67 per share.