Kirby Corporation (“Kirby”) (NYSE:KEX) has announced record net earnings attributable to Kirby for the first quarter ended March 31, 2012 of $50.9 million, or $.91 per share, compared with $32.4 million, or $.60 per share, for the 2011 first quarter. Consolidated revenues for the 2012 first quarter were $566.9 million compared with $299.4 million reported for the 2011 first quarter, the Corp. press release said.
Kirby’s 2012 first quarter results included a $4.2 million before taxes, or $.05 per share, charge associated with increasing the fair value of the United Holdings LLC (“United”) contingent earnout liability, and a $2.4 million before taxes, or $.03 per share, severance charge associated with the integration of Kirby Offshore Marine, LLC (“Kirby Offshore Marine”) into Kirby.
Joe Pyne, Kirby’s Chairman and Chief Executive Officer, commented, “Our first quarter results were helped by a strong inland tank barge market with high equipment utilization levels and favorable term and spot contract pricing. Kirby Offshore Marine performed as expected factoring in typical winter weather operating conditions and the $2.4 million severance charge.
In our diesel engine services segment, United’s business was strong, driven by manufacturing oil service equipment and remanufacturing and servicing existing oil service equipment. Our legacy diesel engine services marine and power generation markets reflected higher operating results from increased service for marine transportation, Gulf Coast oil service and power generation customers.”
Mr. Pyne further commented, “In April, we changed the name of K-Sea Transportation Partners LLC, our coastal marine transportation company acquired in July 2011, to Kirby Offshore Marine thereby more fully integrating our coastal operation into the Kirby family of marine companies. Jim Farley was named President of Kirby Offshore Marine, having previously served as an Executive Vice President in our inland operations. David Grzebinski, our Executive Vice President and Chief Financial Officer, will also serve as Chairman of Kirby Offshore Marine.”
Outlook
Commenting on the 2012 second quarter and full year market outlook and guidance, Mr. Pyne said, “Our earnings guidance for the 2012 second quarter is $.97 to $1.02 per share and we are maintaining our 2012 year guidance of $3.85 to $4.05, excluding any past or potential changes to the United contingent earnout liability. Our second quarter guidance includes improved seasonal operating conditions in both our inland and coastal marine transportation trades, with low to mid 90% utilization levels in our inland trade and mid to high 70% utilization levels in our coastal trade, leading to continued favorable inland pricing and stable coastal pricing. In our diesel engine services segment, with the current industry rotation away from drilling for natural gas to enhanced crude oil exploration, we anticipate favorable demand for the remanufacturing of hydraulic fracturing units and a reduction in the manufacturing of new units. We also anticipate continued favorable marine and power generation markets.”
Mr. Pyne further commented, “Our 2012 capital spending guidance range is $265 to $275 million, including approximately $110 million for the construction of 55 inland tank barges and five inland towboats, and approximately $70 million in progress payments on the construction of a new offshore integrated dry-bulk barge and tugboat unit scheduled for delivery in the 2012 fourth quarter with an estimated total cost of $52 million each.”