Kirby Corporation (KEX) reported third-quarter 2024 earnings of $1.55 per share, which beat the Zacks Consensus Estimate of $1.47 and improved 47.6% year over year.
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Total revenues of $831.1 million surpassed the Zacks Consensus Estimate of $828.8 million and improved 8.6% year over year.
David Grzebinski, Kirby’s chief executive officer, stated, “Our third quarter results reflected steady market fundamentals in both marine transportation and distribution and services, even though we experienced some modest weather and navigational challenges for marine and continued supply challenges in distribution and services. These headwinds were mostly offset by good execution in both marine and distribution and services during the quarter that led to strong financial performance, with total revenues up 9% and earnings per share up 48% year-over-year.”
Total costs and expenses (on a reported basis) grew 4.9% year over year to $704.2million.
Kirby Corporation Price, Consensus and EPS Surprise
The company operates via two segments, namely, marine transportation, and distribution and services.
Revenues in the marine transportation unit improved 13.1% year over year to $486.1 million. Operating income was $99.5 million compared with $63.5 million in the year-ago quarter. Operating margin rose to 20.5% from 14.8% in the year-ago quarter.
In the inland market, average barge utilization was in the 90% range. Inland revenues increased 11% year over year due to pricing. The inland market accounted for 81% of segment revenues. Operating margin was in the low 20% range for the quarter.
In coastal, market conditions were strong during the quarter, with Kirby’s barge utilization in the mid to high-90% range. Coastal revenues increased 23% year over year, driven by better pricing and fewer shipyards. Coastal revenues accounted for 19% of marine transportation segment revenues with an operating margin in the mid-teens range.
Distribution and services revenues for the third quarter were $345.1 million, up 3% year over year. Operating income was $30.4 million compared with $33.2 million in the year-ago quarter. Operating margin fell to 8.8% from 9.9% in the third quarter of 2023.
Power generation revenues in industrial end markets were up 61% year over year while power generation revenues for oil & gas end markets were down. Power generation revenues accounted for almost 32% of segment revenues. Operating margins were in the high single digits.
In the commercial and industrial markets, revenues and operating income increased 4% and 15%, year over year, respectively. Higher business levels in marine engine repair were offset by lower activity in on-highway service and repair. Commercial and industrial revenues accounted for almost 47% of segment revenues. Operating margins were in the high single digits.
In the oil and gas market, revenues grew 19% year over year while operating income declined 14% due to lower levels of conventional oilfield activity which resulted in decreased demand for new transmissions and parts partially offset by deliveries of e-frac equipment. Oil and gas revenues accounted for almost 21% of segment revenues. Operating margins were in the mid to high-single digits.
Balance Sheet Highlights & Cash Flow
As of Sept. 30, 2024, Kirby had cash and cash equivalents of $67.07 million compared with $53.54 million at the end of the prior quarter. Long-term debt, including the current portion was $978.59 million at the third-quarter end compared with $1.04 billion at the end of the prior quarter.
Kirby repurchased 483,335 shares at an average price of $115.46 for $55.8 million in the third quarter.
In third-quarter 2024, Kirby generated $206.5 million of cash from operating activities. Capital expenditures were $76.4 million. Free cash flow was $130.1 million.
Outlook
Under the Marine Transportation segment, for inland marine, KEX expects continued positive market dynamics with limited new barge construction in the industry for the fourth quarter of 2024. Overall, inland revenues are expected to be flat to slightly down sequentially, considering the onset of normal seasonal weather patterns and some expected equipment maintenance. KEX anticipates operating margins to be slightly down compared with the third quarter.
Coastal operating margins are anticipated to be in the mid-to-high single digits in the fourth quarter with coastal revenues expected to be down in the mid-single digits sequentially.
For 2024, distribution and services segment revenues are anticipated to be down in the mid-single digits sequentially with operating margins in the mid to high-single digits but lower than the third quarter of 2024.
Net cash flow provided by operating activities is anticipated in the $600-$700 million band. Our estimate is pegged at $650.2 million.
Capital expenditures are expected to be between $325 million and $355 million (prior view: $300 and $330 million). Our estimate is pegged at $328.8 million.
KEX’s Zacks Rank
Currently, Kirby carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Transportation Companies
Delta Air Lines (DAL) reported third-quarter 2024 earnings (excluding 47 cents from non-recurring items) of $1.50 per share, which fell short of the Zacks Consensus Estimate of $1.56. Earnings decreased 26.11% on a year-over-year basis, mainly due to high labor costs.
DAL’s revenues of $15.68 billion surpassed the Zacks Consensus Estimate of $15.37 billion and increased 1.2% on a year-over-year basis, driven by strong air travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.59 billion, flat year over year.
J.B. Hunt Transport Services, Inc. (JBHT)third-quarter 2024 earnings of $1.49 per share outpaced the Zacks Consensus Estimate of $1.42 but declined 17.2% year over year.
JBHT’s total operating revenues of $3.07 billionsurpassed the Zacks Consensus Estimate of $3.04 billion but fell 3% year over year. The downfall was owing to a 5% and 6% decrease in gross revenue per load in Intermodal (JBI) and Truckload (JBT), respectively, a decline in load volume of 10% and 6% in Integrated Capacity Solutions (ICS) and Dedicated Contract Services (DCS), respectively, and 6% fewer stops in Final Mile Services (FMS). These were partially offset by JBI load growth of 5%, which included growth in both the transcontinental and eastern networks and a 3% increase in revenue per load in ICS. JBHT’s total operating revenue, excluding fuel surcharge revenue, decreased less than 1% from the year-ago reported quarter.
United Airlines Holdings, Inc. (UAL)reported third-quarter 2024 EPS (excluding 43 cents from non-recurring items) of $3.33, which surpassed the Zacks Consensus Estimate of $3.10. Earnings decreased 8.8% on a year-over-year basis.
UAL’s operating revenues of $14.84 billion beat the Zacks Consensus Estimate of $14.76 billion. The top line increased 2.5% year over year due to upbeat air-travel demand. This was driven by a 1.6% rise in passenger revenues (which accounted for 91.3% of the top line) to $13.56 billion. Almost 45,559 passengers traveled on UAL flights in the third quarter, up 2.7% year over year.
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