Kirby Corporation (NYSE: KEX), the leading player in the U.S. inland tank-barge sector, posted better-than-expected Q3 2020 results on Thursday due to cost cuts and a tax gain, but its marine-sector metrics came in worse than feared.
The company reported net income of $27.5 million for Q3 2020 compared to $48 million in Q3 2019. Earnings per share of 46 cents exceeded analyst expectations for 36 cents.
Marine transportation revenues totaled $320.6 million, down 22% from the same period last year. Marine transportation operating income came in at $32.4 million, down 55% from $72.7 million in Q3 2019.
Kirby operates in both the inland and coastal liquid-bulk sectors. In the inland tank-barge segment, ton-miles (cargo volume multiplied by distance) fell 29% year-on-year.
“In marine transportation, our inland and coastal businesses were heavily affected by weak demand for liquid products, including refined products, crude and black oil,” acknowledged Kirby CEO David Grzebinski.
“Throughout the third quarter, refinery utilization was well below historical norms as many customers experienced low consumer demand, high product inventories and unfavorable economics.
“Additionally, a very active hurricane season resulted in further reductions in volumes and widespread disruptions, including prolonged closures of some refineries, chemical plants, waterways and major ports,” said Grzebinski.