April 25, 2007
Kirby Corporation reports record earnings
Kirby Corporation (NYSE: KEX) today announced record net earnings for the first quarter ended March 31, 2007 of $24,422,000, or $.46 per share, compared with net earnings of $22,511,000, or $.42 per share, for the 2006 first quarter. Consolidated revenues for the 2007 first quarter were a record $274,211,000, an increase of 22% over $224,903,000 reported for the 2006 first quarter.
Revenues for the marine transportation segment for the 2007 first quarter increased 10% and operating income increased 11% compared with the first quarter of 2006. The higher results reflected continued strong petrochemical and black oil demand, expected first quarter winter weather conditions, and the impact of contract rate increases during 2006 and the 2007 first quarter, as well as higher spot market prices. The marine transportation operating margin was 18.4% for both the 2007 and 2006 first quarters.
The diesel engine services segment for the 2007 first quarter reported 83% higher revenues and operating income increased 72% compared with the corresponding 2006 quarter. The higher diesel engine services results reflected the accretive acquisitions of Global Power Holding Company on June 7, 2006 and Marine Engine Specialist on July 21, 2006, as well as continued strong in-house and in-field service activity and direct parts sales in its marine, power generation and railroad markets. In addition, the segment benefited from higher service rates and parts pricing implemented during 2006 and in the 2007 first quarter. The diesel engine services operating margin for the 2007 first quarter was 15.2% compared with 16.2% for the 2006 first quarter.
Joe Pyne, Kirby's President and CEO, commented, "Both our marine transportation and diesel engine services business fundamentals remained very strong in the 2007 first quarter. Our inland marine transportation segment was essentially at full utilization, with no spare capacity, and pricing continued to trend upward. The earnings contribution from our four ocean-going barge and tug units was at expected lower levels, as one of the units was in the shipyard for scheduled major maintenance for the entire quarter."
Commenting on the 2007 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 agricultural chemical market. We anticipate our diesel engine services segment to remain strong, although not as strong as the first quarter which historically includes seasonal winter work for Midwest and Great Lakes marine customers. We also expect the earnings contribution from our four offshore barge and tug units to increase as all four units are anticipated to be in service for the majority of the quarter. For the 2007 second quarter, our earnings per share guidance is $.48 to $.53, compared with $.44 per share reported for the 2006 second quarter. For the 2007 year, our earnings per share guidance remains at $1.95 to $2.10 compared with 2006 earnings per share of $1.79. Capital spending guidance for 2007 is $135 to $145 million and includes approximately $65 million for the construction of 26 tank barges and six towboats. Delivery is scheduled throughout 2007 and into early 2008."
Kirby Corporation, based in Houston, Texas, operates inland tank barges and towing vessels, transporting petrochemicals, black oil products, refined petroleum products and agricultural chemicals throughout the United States inland waterway system. Kirby also owns and operates four ocean-going barge and tug units transporting dry-bulk commodities in United States coastwise trade. Through the diesel engine services segment, Kirby provides after- market service for medium-speed and high-speed diesel engines and reduction gears used in marine, power generation and railroad applications.