Kirby Corporation (KEX) reported solid first-quarter 2023 results wherein both earnings and revenues outpaced the Zacks Consensus Estimate.
Quarterly earnings of 68 cents per share outpaced the Zacks Consensus Estimate of 65 cents and improved more than 100% year over year. Total revenues of $750.4 million beat the Zacks Consensus Estimate of $704.7 million and improved 22.9% year over year on the back of higher revenues in the marine transportation and distribution and services segments.
Kirby Corporation Price, Consensus and EPS Surprise
Kirby Corporation price-consensus-eps-surprise-chart | Kirby Corporation Quote
Total costs and expenses (on a reported basis) grew 18.6% year over year to $688.99 million.
The company operates via two segments, namely, marine transportation and distribution and services.
In the first quarter, revenues in the marine transportation unit increased 16% year over year to $412.49 million. Segmental operating income jumped to $43 million in the reported quarter compared with $16.9 million in the year-ago period. The operating margin improved to 10.4% compared with 4.8% in the year-ago period.
Inland market revenues accounted for 82% of the segmental revenues. Revenues in the inland increased 22% year over year, owing to increased volumes, barge utilization, pricing and fuel rebills. Inland’s operating margin was in the low teens for the quarter and was affected by challenges associated with the poor navigational conditions during the quarter. Average barge utilization was in the low to mid-90% range.
Revenues in the coastal market decreased modestly year over year due to downtime associated with planned shipyard maintenance days. It accounted for 18% of marine transportation segmental revenues. Coastal operating margin was negative in the low to mid-single digits and was affected by lost revenues and costs incurred as a result of planned shipyards. Average barge utilization in the reported quarter was in the mid to high-90% range.
In the distribution and services segment, revenues rose 32.4% to $337.94 million. Segmental operating income jumped to $22.8 million in the reported quarter compared with $11 million in the year-ago period. Moreover, the segment reported an operating margin of 6.7% in the first quarter of 2023 compared with 4.3% in first-quarter 2022.
The commercial and industrial sub-group, which accounted for 56% of the segmental revenues, benefited from strong economic activity across the United States, which resulted in higher business levels in marine repair and on-highway. Increased product sales in Thermo King also contributed favorably to year-over-year growth. The operating margin at the commercial and industrial sub-group was in the high-single digits.
The oil and gas sub-group, which accounted for 44% of the segmental revenues during the reported quarter, benefited from higher oilfield activity, resulting in increased demand for new transmissions and parts in the distribution business. Although manufacturing was impacted by supply chain delays, the business continued to witness higher demand with incremental orders and deliveries of new environmentally-friendly pressure pumping equipment and power generation equipment for electric fracturing. The segment had an operating margin in the mid-single digits.
Balance Sheet Highlights & Cash Flow
As of Mar 31, 2023, Kirby had cash and cash equivalents of $26.69 million compared with $80.57 million at the end of December 2022. Total debt was $1,079.64 million at the end of the first quarter compared with $1,079.62 million at the end of December 2022.
During the reported quarter, KEX generated $16.5 million of net cash from operating activities, and capital expenditures came in at $73.2 million. Free cash flow was $56.7 million.
Kirby continues to anticipate net cash generated from operating activities between $480 million and $580 million for 2023. Capital expenditures are expected to lie between $300 and $380 million.
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
J.B. Hunt Transport Services, Inc.’s JBHT first-quarter 2023 earnings of $1.89 per share missed the Zacks Consensus Estimate of $2.04 and declined 17.5% year over year.
JBHT’s total operating revenues of $3,229.58 million also lagged the Zacks Consensus Estimate of $3,434.4 million and fell 7.4% year over year. The downfall was due to declines in the volume of 25% in Integrated Capacity Solutions (ICS), 5% in Intermodal (JBI) and 17% in Final Mile Services (FMS), and a 17% decline in revenue per load in Truckload (JBT). Revenue declines in ICS, JBI, FMS and JBT were partially offset by Dedicated Contract Services revenue growth of 13%.
JBHT’s total operating revenues, excluding fuel surcharges, decreased 10.2% year over year.
Delta Air Lines’ DAL first-quarter 2023 earnings (excluding 82 cents from non-recurring items) of 25 cents per share missed the Zacks Consensus Estimate of 29 cents. Volatile fuel prices and unfavorable weather conditions led to this downtick. DAL reported a loss of $1.23 per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $12,759 million, which missed the Zacks Consensus Estimate of $12,767.4 million. Driven by higher air-travel demand, total revenues increased 36.49% on a year-over-year basis.
Alaska Air Group, Inc. ALK reported first-quarter 2023 loss of 62 cents per share, wider than the Zacks Consensus Estimate of a loss of 48 cents. In the year-ago quarter, ALK incurred a loss of $1.33 per share.
ALK’s operating revenues of $ 2,196 million missed the Zacks Consensus Estimate of $2,202.5 million. The top line jumped 31% year over year, with passenger revenues accounting for 90.3% of the top line and increasing 31% owing to continued recovery in air-travel demand.
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