Shares of Kirby Corporation (KEX) have gained 4.3% since its first-quarter 2025 earnings release on May 1, 2025. The uptick can be attributed to the better-than-expected earnings performance.
Kirby reported mixed first-quarter 2025 earnings results wherein the company’s earnings beat the Zacks Consensus Estimate but revenues missed the same.
Quarterly earnings of $1.33 per share surpassed the Zacks Consensus Estimate of $1.27 and improved 11.7% year over year. Total revenues of $785.7 million missed the Zacks Consensus Estimate of $831.4 million and declined 2.7% year over year.
David Grzebinski, Kirby’s chief executive officer, stated, “Our first quarter results reflected improved market fundamentals in marine transportation and continued strong demand for power generation in distribution and services. These positive trends were partially offset by weather and navigational challenges in the marine sector, as well as continued supply delays in distribution and services. Overall, our combined businesses performed well during the quarter.
Kirby Corporation price-consensus-eps-surprise-chart | Kirby Corporation Quote
The company operates via two segments, namely, marine transportation and distribution and services.
Marine transportation revenues for the first quarter were $476.1 million, marginally up 0.2% year over year. Operating income for the first quarter was $86.6 million compared with $83.0 million in the year-ago quarter. Segment operating margin rose to 18.2% from 17.5% in the year-ago quarter.
In the inland market, first-quarter average barge utilization was in the low to mid-90% range, the same as the year-ago quarter. Operating conditions on the inland waterways were affected by winter weather conditions, including significant wind and fog along the Gulf Coast, as well as lock delays on the Mississippi River, all of which contributed to a 50% sequential increase in delay days. Average spot market rates increased in the low-single digits sequentially and in the high-single digit range year over year. Term contracts that were renewed in the first quarter increased in the mid-single digits on average compared to a year ago. The inland market accounted for 82% of segment revenues, with Inland’s operating margin around 20% for the quarter.
In coastal markets, conditions remained solid during the reported quarter, with Kirby’s barge utilization in the mid to high-90% range. Average spot market rates increased in the low to mid-single digits sequentially and in the low 20% range on a year-over-year basis. Term contracts that were renewed in the first quarter increased by an average of mid-20% compared to the same period last year. Coastal revenues fell 6% year over year as elevated levels of planned shipyards were partially offset by increased pricing. Coastal revenues accounted for 18% of the marine transportation segment's revenues, with an operating margin in the high single to low double-digit range.
Distribution and services revenues for the first quarter were $309.5 million,down 6.9% year over year. Operating income for the first quarter was $22.6 million compared with $22 million in the year-ago quarter. Operating margin rose to 7.3% from 6.6% in the year-ago quarter.
In the power generation market, revenues declined 23% year over year as supply delays pushed the delivery of some projects out of the quarter. Orders continued to grow as the need for 24/7 power and backup capabilities remains critical. Power generation revenues accounted for 34% of segment revenues. Power generation operating margins were in the mid-to-high single digits.
In the commercial and industrial market, revenues and operating income increased 12% and 23% on a year-over-year basis, respectively, as higher business levels in marine repair were offset by lower activity in on-highway repair. Overall, commercial and industrial revenues accounted for 52% of segment revenues. Commercial and industrial operating margins were in the high single digits.
In the oil and gas market, revenues declined 18% while operating income increased 123% on a year-over-year basis, driven by lower levels of conventional oilfield activity, which resulted in decreased demand for new transmissions and parts. This decline was partially offset by the deliveries of e-frac equipment. Oil and gas revenues accounted for 14% of segment revenues. Oil and gas operating margins were in the high single digits.
As of March 31, 2025, Kirby had cash and cash equivalents of $51.1 million compared with $74.4 million at the end of the prior quarter.
During the reported quarter, KEX generated $36.5 million of net cash from operating activities, and capital expenditures were $78.7 million.
Kirby repurchased 1,258,031 shares at an average price of $99.16, totaling $124.7 million as of April 30, 2025.
Under the Marine Transportation segment, for inland marine, KEX anticipates positive market dynamics due to limited new barge construction. Barge utilization rates are expected to be in the low to mid-90% range for the year, with continued improvement in term contract pricing as renewals occur throughout the year. Overall, inland revenues are expected to grow in the mid-to-high single-digit range for 2025. KEX anticipates that operating margins will gradually improve during the year from first-quarter levels and average 200-300 basis points higher for the full year.
In coastal marine, steady customer demand is anticipated to keep the barge utilization in the mid-90% range. Revenues for 2025 are anticipated to increase in the high-single to low-double-digit range on a year-over-year basis, driven by higher pricing on contracts. Coastal operating margins are anticipated to improve to the mid-teens range on a full-year basis.
In distribution and services, demand is expected to remain mixed, as near-term volatility from supply issues, customer deferrals of maintenance, and lower overall activity in the oil and gas sector are partially offset by orders for power generation. For 2025, distribution and services segment revenues are anticipated to be flat to slightly down, with operating margins in the high-single digits but slightly lower year over year.
Net cash flow provided by operating activities is anticipated to be in the $620-$720 million band. Capital expenditures are expected to be between $280 million and $320 million.
Currently, Kirby carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We note that another player from the broader Zacks Transportation sector, Landstar System LSTR, will report its first-quarter earnings numbers later this month. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Landstar System is scheduled to report first-quarter 2025 earnings on May 13. The company’s performance in the first quarter is expected to have suffered from weak freight demand, geopolitical uncertainty, tariff-related uncertainties and high inflationary pressure.
LSTR has outpaced the Zacks Consensus Estimate for earnings in two of the last four quarters (missing the mark on the other two occasions). The average miss is 0.6%.
United Airlines’ UAL first-quarter 2025 earnings per share (excluding 25 cents from non-recurring items) of 91 cents surpassed the Zacks Consensus Estimate of 75 cents. In the year-ago quarter, the Chicago-based airline reported a loss of 15 cents per share.
Operating revenues of $13.21 billion fell marginally short of the Zacks Consensus Estimate of $13.22 billion. The top line increased 5.4% year over year despite the tariff-induced slowdown in domestic air travel demand. Passenger revenues (which accounted for 89.7% of the top line) rose 4.8% to $11.9 billion. UAL flights transported 40,806 passengers in the first quarter, up 3.8% year over year.
Delta Air LinesDAL reported first-quarter 2025 earnings (excluding 9 cents from non-recurring items) of 46 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents. Earnings increased 2.2% on a year-over-year basis due to low fuel costs.
Revenues in the March-end quarter were $14.04 billion, surpassing the Zacks Consensus Estimate of $13.81 billion and increasing 2.1% on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) rose 3.3% year over year to $13 billion.
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