Net earnings attributable to Kirby Corp. fell 33.8 percent year-over-year during the quarter to $25.8 million, despite consolidated revenues rising 7.2 percent to $473.3 million, according to the tank barge operator’s most recent financial statements.
Net earnings attributable to Kirby Corp. totaled $25.8 million for the second quarter of 2017, tumbling 33.8 percent year-over-year as growth in the Diesel Engine Services segment was not strong enough to offset the sluggish Marine Transportation segment, according to the tank barge operator’s latest financial statements.
Second quarter net earnings include pre-tax expenses of $700,000 related to the pending acquisition of Stewart & Stevenson LLC, a global manufacturer and distributor of products and services for the oil and gas, marine, construction, power generation, transportation, mining and agricultural industries. Kirby signed a definitive agreement in June to acquire substantially all of the assets and businesses of Stewart & Stevenson for approximately $710 million before post-closing adjustments and transaction fees. Kirby expects to close on the deal in the third quarter of this year.
Despite a decline in earnings, Kirby recorded a 7.2 percent year-over-year boost in consolidated revenues for the quarter to $473.3 million.
The Marine Transportation segment recorded an operating income of $35.8 million on revenues of $331.3 million for the quarter, down 50.8 percent and 12.4 percent year-over-year, respectively.
The segment saw weaker term and spot pricing in the inland market, and increased idle time and voyage costs in the coastal market as more barges operated in the spot market.
In the inland market, barge utilization hovered in the mid-80 percent to high 80 percent range during the quarter, while in the coastal market, tank barge utilization was in the high 60 percent to mid-70 percent range.
“We remain steadfast in our view of the long-term potential in our marine transportation markets. The inland market, in particular, has experienced one of the most severe and long-lasting downturns in the past three decades,” said Kirby President and CEO David Grzebinski.
“This sets up a market that is conducive to both consolidation and a lack of capital investment by the competition, which plays to Kirby’s strength and future growth opportunities,” he continued. “We are committed and have the balance sheet capacity to pursue the right acquisitions in the inland marine market, and we expect to emerge from this downturn larger and more efficient.”
Meanwhile, in the Diesel Engine Services segment, operating income for the quarter reached $16.4 million, up from a loss of $2 million for the second quarter of 2016, while revenues soared 124.5 percent year-over-year to $142.1 million. Kirby attributed the segment’s strong results to improved demand for the remanufacturing of pressure pumping units, rebuilt transmissions, and an increase in the sale of new pressure pumping units.
Kirby Corp. earnings tumble in Q2 2017
