April 24, 2008
Kirby has another record quarter
Kirby Corporation (NYSE: KEX) reports record net earnings for the first quarter ended March 31, 2008 of $36.6 million, or $.68 per share, compared with net earnings of $24.4 million, or $.46 per share, for the 2007 first quarter. Kirby's initial published 2008 first quarter earnings guidance range was $.57 to $.62 per share, which was revised to exceed $.66 per share on March 17. Consolidated revenues for the 2008 first quarter were a record $330.6 million, an increase of 21% over the $274.2 million reported for the 2007 first quarter.
"Our financial results produced the seventeenth consecutive quarter in which our earnings exceeded the same quarter of the previous year," said President and CEO Joe Pyne. "The marine transportation fundamentals remain favorable. We operated additional boats during the quarter and operated more equipment on time charters which are insulated from revenue fluctuations caused by weather and navigational delays and temporary market declines. Our diesel engine services segment continued to experience strong demand in our medium-speed markets, while our high-speed Gulf Coast market was, as expected, slower due to seasonal softness in the oil service market."
Marine transportation revenues and operating income for the 2008 first quarter increased 25% and 44%, respectively, compared with the first quarter of 2007. A major driver with respect to the 25% increase in marine transportation revenues was the recovery of higher diesel fuel costs. The marine transportation operating margin was 21.3% for the 2008 first quarter compared with 18.4% for the 2007 first quarter. The record results reflected continued strong demand, higher contract and spot market rates, rate escalators on multi-year contracts and increased efficiencies from the continued improvement in vessel personnel and towboat availability, partially offset by increased delay days caused by winter weather conditions compared with the 2007 first quarter.
Diesel engine services revenues and operating income for the 2008 first quarter increased 6% and 12%, respectively, compared with the 2007 first quarter. The diesel engine services operating margin was 16.0% for the 2008 first quarter compared with 15.2% for the 2007 first quarter. The record results reflected continued strong demand for service work and parts sales in the medium-speed engine markets, benefiting from seasonal work for Midwest and Great Lakes customers, and a large power generation modification project. The high-speed Gulf Coast market, as anticipated, was slower due to seasonal softness in demand for diesel engine services to the oil service market. The results also reflected the accretive acquisition in July 2007 of Saunders Engine and Equipment Company, Inc., a high-speed diesel engine services provider.
Commenting on the 2008 second quarter, 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 also anticipated to remain favorable. We do anticipate a significant increase in delay days in the second quarter due to high water conditions on the Mississippi River System which will have a negative impact on our second quarter financial results. For the 2008 second quarter, our earnings guidance is $.69 to $.74 per share, reflecting a 23% to 32% increase compared with $.56 per share for the 2007 second quarter, and takes into account anticipated navigational delays due to the high water conditions on the Mississippi River. For the 2008 year, we are increasing our guidance range to $2.74 to $2.89 per share, reflecting a 20% to 26% increase over the 2007 net earnings of $2.29 per share. Our 2008 capital spending guidance remains at $150 to $160 million, which includes approximately $80 million for the construction of new tank barges and towboats."