January 30, 2008
Kirby plans $80 million barge and towboat newbuild investment
Reporting record results, Kirby Corporation (NYSE: KEX) says that it plans to invest approximately $80 million for the construction of new tank barges and towboats. this year,
Kirby announced record net earnings for the fourth quarter ended December 31, 2007 of $34.4 million, or $.64 per share, compared with net earnings of $23.4 million, or $.44 per share, for the 2006 fourth quarter. Kirby's initial published 2007 fourth quarter earnings guidance range was $.57 to $.62 per share, which was revised to exceed $.62 per share on January 14. Consolidated revenues for the 2007 fourth quarter were a record $307.9 million, an increase of 22% over the $251.4 million reported for the 2006 fourth quarter.
"The record fourth quarter marked the 16th consecutive quarter that our earnings exceeded the same quarter of the previous year," said Joe Pyne, Kirby's President and CEO. "Strong demand continued in all of the marine transportation markets Kirby services. Our fleet of tank barges and towboats remained essentially fully utilized and pricing for our services remained consistent with the first nine months of 2007. We did experience an increase in delay days and a corresponding decrease in efficiency caused by typical poor operating conditions during the 2007 fourth quarter."
Mr. Pyne noted that the diesel engine services segment continued to experience strong demand for service work and parts sales in the medium-speed markets, with some seasonal slowdown in demand in high-speed service. He said diesel services continued to benefit from high labor utilization, higher service rates and parts pricing implemented during 2006 and 2007, and from accretive acquisitions completed during 2006 and 2007."
Kirby reported record net earnings for the 2007 year of $123.3 million, or $2.29 per share, compared with $95.5 million, or $1.79 per share, for 2006. Consolidated revenues for the 2007 year were a record $1.17 billion, a 19% increase compared with $984.2 million for 2006.
Marine transportation revenues and operating income for the 2007 fourth quarter increased 23% and 40%, respectively, compared with the fourth quarter of 2006. For the 2007 year, marine transportation revenues and operating income increased 15% and 28%, respectively, compared with 2006. The higher results for both 2007 periods reflected continued strong demand in all of Kirby's transportation markets: petrochemical, black oil, refined products and agricultural chemicals. The marine transportation operating margin was 21.8% for the 2007 fourth quarter compared with 19.0% for the 2006 fourth quarter and 21.1% for the 2007 year compared with 19.0% for 2006. Higher operating margins reflected strong demand, higher rates on contract renewals and spot market pricing, rate escalators on a number of multi-year contracts and continued improvement in vessel personnel and towboat availability, partially offset by increased delay days caused by winter weather conditions and low water levels during 2007 compared with 2006 periods.
DIESEL ENGINE SERVICES
The diesel engine services revenues and operating income for the 2007 fourth quarter increased 21% and 41%, respectively, compared with the 2006 fourth quarter. For the 2007 year, diesel engine services revenues and operating income increased 38% and 44% compared with 2006. The results for both 2007 periods reflected the accretive acquisitions of Global Power Holding Company in June 2006, Marine Engine Specialists, Inc. in July 2006, and Saunders Engine and Equipment Company, Inc. in July 2007, all high-speed diesel engine service companies. The diesel engine services operating margin was 15.6% for the 2007 fourth quarter compared with 13.4% for the 2006 fourth quarter and 15.6% for the 2007 year compared with 14.9% for 2006.
Commenting on the 2008 first quarter and year, Mr. Pyne said, "We expect our marine transportation business levels to remain strong and anticipate continued favorable contract and spot market rate increases. Business levels in our diesel engine services markets are anticipated to remain strong. For the 2008 first quarter, our earnings guidance is $.57 to $.62 per share compared with $.46 per share for the 2007 first quarter. For the 2008 year, our guidance range is $2.55 to $2.70 per share compared with 2007 net earnings of $2.29 per share. Our capital spending guidance for 2008 is $150 to $160 million, which includes approximately $80 million for the construction of new tank barges and towboats."