Kirby Corporation First-Quarter Earnings, Revenue Jump
Kirby Corporation announced April 27 that its net earnings for the first quarter of 2023 were $40.7 million or $0.68 per share, compared to $17.4 million or $0.29 per share for the first quarter of 2022.
Revenues for the first quarter of 2023 were $750.4 million, up from $610.8 million a year ago.
“We are off to a solid start in 2023,” said David Grzebinski, Kirby president and CEO. “Both of our segments performed well during the quarter, delivering improved revenue and operating income, and our team executed well despite weather-related delays in the marine transportation segment and continuing supply-chain disruptions in distribution and services. We continue to see 2023 progressing well, and we expect meaningful quarterly earnings progression for the remainder of the year.”
The company’s operations faced a variety of difficulties in the first quarter, Grzebinski said.
“In inland marine transportation, throughout the quarter, our operations were challenged by high winds and heavy fog along the Gulf Coast, and lock delays on the Illinois and Mississippi rivers,” he said. “Overall, delay days increased 31 percent compared to the first quarter of 2022 and 33 percent compared to the 2022 fourth quarter.
“From a demand standpoint, customer activity was strong in the quarter with barge utilization rates running in the low to mid-90s throughout the quarter. Spot market prices were up in the low to mid-single digits sequentially and in the 25 percent range year-over-year. Term contract prices also renewed up higher with low double digit increases versus a year ago. Overall, first quarter inland revenues increased 22 percent year-over-year, and margins were in the low teens range.
“In coastal, market fundamentals continued to slowly improve with our barge utilization levels running in the mid to high-90 percent range. During the quarter, we saw solid customer demand and limited availability of large-capacity vessels, which resulted in low double-digit price increases on term contract renewals and low 20 percent increases on new spot deals. Our results were impacted by planned shipyard maintenance on several large vessels. Additionally, our operations on the Gulf Coast were hindered by the extensive fog throughout the quarter. Overall, first quarter coastal revenues decreased slightly year-over-year, and operating margins were negative in the low single digits.”
Overall marine transportation revenues for the 2023 first quarter were $412.5 million, compared with $355.5 million for the 2022 first quarter. The inland market represented 82 percent of Kirby’s marine transportation segment revenues in the first quarter of 2023.
In Kirby’s distribution and services segment, revenues were $337.9 million for the first quarter, up from $255.2 million for the 2022 first quarter.
Kirby made $73.2 million in overall capital expenditures in the first quarter; at the end of the quarter, the company had $26.7 million of cash and cash equivalents, and $419 million of liquidity available.
2023 Outlook
In the earnings statement, the company said that strong barge utilization in the inland market is expected to continue, with continued growth in consumer demand, steady volumes from refinery and petrochemical plants and modest net new barge construction in the industry. Kirby expects further improvements in the spot market, which currently represents about 45 percent of its inland revenues.
The company expects to generate net cash provided from operating activities of $480 million to $580 million in 2023. 2023 capital spending is expected to range between $300 to $380 million. Up to approximately $40 million is associated with the construction of new inland equipment, and about $240 million is associated with marine maintenance capital and improvements to existing inland and coastal marine equipment, including ballast water treatment systems on some coastal vessels, and facility improvements. The balance of up to approximately $100 million largely relates to new machinery and equipment and facility improvements in distribution and services, as well as information technology projects in corporate, the company said.
“Although first quarter results were materially challenged by bad weather in marine transportation, we exited the quarter in a solid position, and we anticipate improved results in marine as we progress through the remainder of 2023,” Grzebinski said. “In distribution and services, despite supply chain constraints, demand for our products and services is growing, and we continue to receive new orders in manufacturing. Overall, we expect our businesses to deliver improved financial results in the coming quarters.
“While all of this is encouraging, we are mindful of challenges related to an economic slowdown and associated headwinds from higher interest rates,” he added. “With these uncertainties in mind, we will continue to focus on costs and drive strong cash flow from operations. As we look long-term, we are confident in the strength of our core businesses and our long-term strategy. We intend to continue capitalizing on strong market fundamentals and driving shareholder value creation.”
