Kirby Corp. profits, revenues drop in 2015

The Houston, Texas-based tank barge operator posted net earnings attributable to Kirby of $226.7 million on consolidated revenues of $2.1 billion for 2015, year-over-year declines of 19.6 percent and 16.3 percent, respectively.    Kirby Corporation’s net earnings attributed to shareholders totaled $226.7 million for 2015, while consolidated revenues reached $2.1 billion, a year-over-year decline of 19.6 percent and 16.3 percent, respectively, according to the tank barge operator’s most recent unaudited financial statements.
   Diluted earnings per share declined from $4.93 per diluted share for 2014 to $4.11 per diluted share for 2015.
   In the fourth quarter alone, net earnings attributable to Kirby totaled $50.7 million and consolidated revenues reached $484.1 million, a year-over-year decline of 25.5 percent and 27.6 percent, respectively.
   Kirby decreased diluted earnings per share from $1.19 per diluted share for the fourth quarter of 2014 to $0.94 per diluted share for the fourth quarter of 2015.
   The marine transportation segment’s fourth quarter revenues totaled $399.8 million, a 6.9 percent decline from the same period in 2014, which the company primarily attributed to a 41 percent drop in the average price of marine diesel fuel. To a lesser extent, the segment’s revenues were hindered by an increase in inland marine delay days, lower pricing and a rise in available spot market days for certain offshore marine equipment.
   Fourth quarter operating income for the marine transportation segment reached $87.9 million, a 15.6 percent year-over-year decline.
   The marine transportation segment’s operating margin was 22 percent for the quarter, compared with 24.3 percent for the fourth quarter of 2014. Kirby attributed the decline to higher labor costs, lower inland marine transportation rates, higher depreciation expense in the coastal business and the impact of fuel price escalators on inland marine affreightment contracts.
   Revenues for the diesel engine services segment tumbled 64.7 percent year-over-year in the fourth quarter to $84.3 million.
   In addition, the segment posted an operating loss of $464,000, a 103.6 percent decline from the fourth quarter of 2014.
   Kirby attributed the sharp declines in the diesel engine services segment’s revenue and the operating loss primarily to the lack of pressure pumping unit manufacturing and re-manufacturing and a drop in demand for parts and services in the land-based oilfield service market. The sale of UE Compression LLC, which closed in early November, also hindered the segment’s financial results.
   Looking ahead, Kirby’s overall earnings guidance range for the first quarter of 2016 is $0.75 per share to $0.85 per share, while the company’s full year 2016 earnings guidance is $3.00 per share to $3.50 per share. These ranges reflect Kirby’s limited visibility as a result of today’s environment of weakening global growth and volatile commodity prices, Kirby President and CEO David Grzebinski said.
   “While we enter 2016 with an uncertain outlook and a number of market challenges, we believe we will have an increase in free cash flow over 2015,” Grzebinski said. “The increase in free cash flow, our leading position in the tank barge industry, and our balance sheet strength put us in position to take advantage of opportunities that are often available in difficult market environments.”
   Based out of Houston, Texas, Kirby transports bulk liquid products through the Mississippi River System, the Gulf Intracoastal Waterway, along all three U.S. coasts, and in Alaska and Hawaii. The company also operates offshore dry-bulk barge and tugboat units, which are responsible for transporting dry-bulk cargo throughout the U.S. coastal trade.  In addition, Kirby’s diesel engine services segment provides after-market service for medium speed and high speed diesel engines and reduction gears.