Kirby Corp. profits plummet in Q3 2016

The Houston, Texas-based tank barge operator posted a net income of $32 million for the quarter, a 43.7 percent drop from $56.8 million in the third of quarter 2015, according to the company’s most recent financial statements.    Kirby Corp. saw net earnings attributable to shareholders in the third quarter of 2016 plummet 43.7 percent to $32 million compared with the same 2015 period, according to the company’s most recent financial statements.
   The Houston, Texas-based tank barge operator reported diluted earnings per share (EPS) of  $0.59 for the quarter compared with $1.04 per share the previous year.
   Third quarter revenues tumbled 18.4 percent year-over-year to $434.7 million.
   Kirby Corp.’s marine transportation segment posted an operating income of $55.5 million on revenues of $359 million, declines of 40.8 percent and 14.2 percent, respectively, from the prior year.
   The company’s diesel engine services segment posted an operating income of $4.6 million for the quarter, a 17.4 percent drop from Q3 2015, as revenues fell 33.7 percent percent year-over-year to $75.7 million.
   Through the first nine months of 2016, net earnings fell 38 percent to $109.1 million on revenues that slipped 11.7 percent to $1.12 billion from the same 2015 period.
   “Our results in the third quarter reflected trends across our markets that were largely as expected. In our inland marine transportation market, barge utilization was in the low-to-mid 80% range, down from the high-80 percent to low-90 percent range during the second quarter,” said Kirby Corp. President and CEO David Grzebinski. “The third quarter was aided somewhat by increased demand for refined petroleum product and black oil movements following a series of customer supply chain disruptions late in the quarter. In the coastal marine transportation market, tank barge utilization was in the low-to-mid 80 percent range during the third quarter and the trend of customers moving to the spot market continued.
   “Within our diesel engine services segment, the land-based market experienced some improvement in service activity, but customer demand for engines, transmissions and parts remained weak,” he added. “We received orders for pressure pumping unit service and remanufacturing work in increasing numbers through the quarter in terms of both quantity and diversity of customers. In our marine diesel engine services business, we experienced continued weakness in the Gulf of Mexico oilfield services market, but this was largely offset by strong performance in our power generation market.”
   Looking ahead to the remainder of the year, Grzebinski said Kirby is lowering its fourth quarter EPS projection to between $0.45 and $0.60 per share, a steep decline from the $0.94 per share earned in fourth quarter 2015.
   As a result, the company has narrowed its full year EPS guidance to between $2.47 and $2.62 per share, from a previous range of $2.40 to $2.70 per share, compared with $4.11 per share last year.
   “We believe the industry is responding to lower utilization by cutting capital spending and accelerating barge retirements, which should bring supply and demand back into balance,” said Grzebinski.