America’s largest tank barge operator, Kirby Corporation (NYSE: KEX), today reported first quarter net earnings of $44.3 million, or $0.74 per share, compared with earnings of $32.5 million, or $0.54 per share, for the 2018 first quarter. Excluding certain one-time charges, 2018 first quarter net earnings were $37.9 million, or $0.63 per share. Consolidated revenues for the first quarter were $744.6 million compared with $741.7 million reported for the 2018 first quarter.
“Kirby’s first quarter results were challenged by temporary weakness in marine transportation which resulted from record delay days,” commented Kirby President and CEO David Grzebinski. “Our distribution and services segment performed well, helping to offset the results from our marine businesses.”
Grzebinski said that although the company anticipated weather related delays in the first quarter, “this year we experienced significantly more than expected with persistent fog along the Gulf Coast, extended periods of ice on the Illinois River, and near record high water conditions on the Mississippi River.”
He added that “additionally, there were significant navigational delays resulting from lock maintenance and the closure of the Houston Ship Channel in March due to a fire at a chemical storage facility.”
These conditions resulted in an approximate 80% increase in delay days from last year’s more normal first quarter.
“However, demand remained strong throughout the quarter, and barge utilization strengthened into the mid-90% range on average,” said Grzebinski. “I would like to thank our mariners and shore staff who performed extremely well despite these very difficult operating conditions, remaining focused on safety and serving the needs of our customers.”
Grzebinsk also noted that mid-March, Kirby closed the acquisition of Cenac Marine Services, LLC’s marine transportation fleet.
“Cenac brings to Kirby a young fleet of well-maintained 30,000 barrel tank barges and new modern towboats, as well as highly-trained and first class mariners,” said Grzebinsk. “With tight market conditions across the inland industry, the Cenac acquisition is well-timed and will improve our ability to service our customers and enhance our long-term earnings potential.”
FULL YEAR OUTLOOK
Grzebinski said that the company’s earnings guidance range for the year remains $3.25 to $3.75 per share.
Kirby 2019 capital spending outlook is expected to be in the $225 to $245 million range. Capital spending guidance includes approximately $45 million in progress payments on new marine vessels, which includes three 5000 horsepower coastal tugboats and thirteen 2600 horsepower inland towboats. Approximately $155 to $165 million is associated with capital upgrades and improvements to existing inland and coastal marine equipment (including approximately $25 million for coastal ballast water treatment systems) and marine facility improvements. The balance of approximately $30 million largely relates to new machinery and equipment, rental fleet growth, facility improvements, and information technology projects in the distribution and services segment.