Kirby reported fourth-quarter earnings that were better than analysts estimates thanks to stronger demand in December. But results this year are likely to be at lower end of its previous guidance.
The New York-listed company reported net earnings of $32.8m for the fourth quarter compared to $51m in the year-earlier quarter. Earnings per share of $0.60 was better than $0.52 consensus estimate.
Total revenue dropped to $435m in the fourth quarter versus year-earlier revenue of $484m.
Chief executive David Grzebinski said the results were at the high end of the company's expectations, thanks to higher utilisation for its brownwater barge fleet in December. Weather delays, retirement of older barges and an improvement in volumes led to utilisation in the high 80% range, he said.
However, the coastal tanker barge fleet, which competes Jones Act-compliant tankers, saw utilisation in the low 80% range due to customers switching to vessels trading in spot market.
For this year, Grzebinski expects similar trends to continue. The brownwater fleet should see better demand thanks to vessel retirements, no newbuildings and additional volumes. But coastal transportation demand could slacken as more vessels trade in the spot market.
Full-year 2017 earnings guidance was given in a range of $1.70 to $2.20 per share. Wells Fargo analyst Michael Webber says the midpoint of that range is below his $1.98 per share and consensus estimates of $2.22 per share.
Seaport analyst Kevin Sterling says inland tank barge deliveries were at their "lowest level in a decade" last year, suggesting that market is nearer a bottom. But coastal tank barge markets "just began rolling over last year, which may continue for sometime."
Additionally, rates for Jones Act tankers are also facing pressure, "which may pressure the coastal markets even more if this equipment begins to traffic in traditional (coastal tank barge) trade lanes," Sterling says.
