January 26 2006
Kirby reports record fourth quarter
Inland waterways tank barge giant Kirby Corporation (NYSE: KEX) announced record net earnings for the quarter ended December 31, 2005 of $19,770,000, a 46 percent increase on the $13,496,000 of the fourth quarter of 2004. Revenues for the 2005 fourth quarter were $213,261,000, a 23 percent increase compared with $173,739,000 for the 2004 fourth quarter.
Kirby also reported record net earnings for the 2005 year of $68,781,000, a 39 percent increase compared with $49,544,000 for 2004 year. Revenues for 2005 year were $795,722,000, an 18 percent increase compared with 2004.
Kirby says both fourth quarter and annual results for 2005 reflected strong petrochemical and black oil products demand, higher contract rate renewals and stronger spot market pricing.
Favorable weather conditions positively impacted the 2005 fourth quarter results, with delay days down 27 percent and ton miles increasing 8 percent compared with the 2004 fourth quarter. Operating margins for the 2005 fourth quarter improved to 19.3 percent compared with 16.4 percent for the 2004 fourth quarter, and for the 2005 year improved to 17.4 percent compared with 15.7 perecnt in 2004.
Kirby's diesel engine services segment reported a 22 percent increase in revenues and a 37 percent increase in operating income for the 2005 fourth quarter. For the 2005 year, revenues increased 27 percent and operating income rose 53% when compared with 2004. The record results for both 2005 periods reflected continued strong service and parts sales in the majority of its marine, power generation and railroad markets, as well as higher service rates and parts pricing. Operating margins for the 2005 fourth quarter improved to 9.9 percent compared with 8.8 percent for the 2004 fourth quarter, and for the 2005 year improved to 11.7 percent compared with 9.7 percent in 2004.
Capital expenditures for 2005 totaled $122.3 million, including $62.6 million for new tank barges which included a combination of additional capacity and replacement capacity, $3.2 million for new towboats, and $56.5 million principally for upgrading the existing marine transportation fleet.
Joe Pyne, Kirby's President and Chief Executive Officer, said the 2005 results were "a direct reflection of strong marine transportation and diesel engine services markets, favorable rate increases in the marine sector, price increases in the diesel sector and a continued favorable safety performance, thereby reducing the cost of injuries and spills."
Commenting on the 2006 first quarter guidance, Pyne said, "We are forecasting net earnings for the 2006 first quarter in the $.64 to $.70 per share range compared with net earnings of $.52 per share reported for the 2005 first quarter. Our first quarter results are more volatile due to the probability of increased delay days, the result of high or low water conditions, ice conditions in the Midwest and fog along the Gulf Coast. So far, weather conditions have been favorable through January; however, during February and March weather conditions can deteriorate quickly. Our guidance range anticipates continued strong demand for petrochemicals and black oil products, and normal seasonal upriver refined products and agricultural chemical demand."
"For the 2006 year," he said, "Kirby's earnings per share guidance range is $2.95 to $3.15. The guidance range includes an estimated $.05 per share of expense from the adoption, effective January 1, 2006, of the fair value method of accounting for stock-based employee compensation. Capital spending guidance for 2006 is $110 to $120 million and includes approximately $50 million for the construction of 23 tank barges, each with a capacity of 30,000 barrels, and four towboats."