Kirby (KEX) Stock Declines 3.5% Since Q3 Earnings Release
Shares of Kirby Corporation KEX have shed 3.5% of their value ever since the shipping company disclosed its third-quarter 2023 results on Oct 26. Even though Kirby’s third-quarter earnings outpaced the Zacks Consensus Estimate, revenues lagged expectations, resulting in the stock price depreciation.
Q3 Results in Detail
Quarterly earnings of $1.05 per share surpassed the Zacks Consensus Estimate of $1.02 and improved 61.5% year over year. The uptick was aided by lower costs.
Total revenues of $764.8 million missed the Zacks Consensus Estimate of $794.6 million. However, revenues rose 2.5% year over year on the back of impressive performance of the distribution and services segment despite headwinds. Total costs and expenses (on a reported basis) declined 2.3% year over year to $671.2 million.
Revenues in the marine transportation unit decreased 0.7% year over year to $429.8 million, lower than our estimate of $454.3 million. Segmental operating income jumped to $63.5 million compared with $41.7 million a year ago. The operating margin improved to 14.8% compared with 9.6% in the year-ago period.
Inland market revenues (accounted for 82% of segmental top line) inched up 2% year over year, primarily due to challenging operating conditions led by lower utilization of Illinois river lock closures.
Coastal revenues (18%) dipped year over year primarily due to downtime associated with planned shipyard maintenance days. Coastal operating margin was around breakeven as favorable pricing was partially offset by lost revenues and costs incurred as a result of planned shipyards. Average barge utilization was in the mid-90% range.
In the distribution and services segment, revenues improved 7% to $334.8 million. This, however, fell short of our projection of $340.3 million. Overall, oil and gas represented 37% of segmental revenues. Oil and gas operating margins were in the low double digits.
As of Sep 30, 2023, Kirby had cash and cash equivalents of $42.1 million compared with $80.57 million at the end of December 2022. Total debt was $1,067.9 million at third-quarter end compared with $1,079.62 million at the end of December 2022. Available liquidity was $451 million. Capital expenditures were $104 million.
2023 Outlook
Net cash flow provided by operating activities is anticipated in the $475-$525 million band. Capital expenditures are expected to be between $330 and $380 million. Free cash flow generation is projected in the range of $100-$150 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 Some Other Transportation Companies
J.B. Hunt Transport Services' JBHT third-quarter 2023 earnings per share of $1.80 missed the Zacks Consensus Estimate of $1.85 and declined 30% year over year.
JBHT’s total operating revenues of $3,163.8 million also lagged the Zacks Consensus Estimate of $3,224 million and tumbled 18% year over year. Total operating revenues, excluding fuel surcharges, decreased 15% year over year.
Delta Air Lines DAL reported third-quarter 2023 earnings (excluding 31 cents from non-recurring items) of $2.03 per share, which comfortably beat the Zacks Consensus Estimate of $1.92 and improved 35% on a year-over-year basis.
DAL’s revenues of $15,488 million beat the Zacks Consensus Estimate of $15,290.4 million and increased 11% on a year-over-year basis, driven by higher air-travel demand.
Alaska Air Group ALK reported third-quarter 2023 earnings per share of $1.83, which missed the Zacks Consensus Estimate of $1.88 and declined 28% year over year.
Operating revenues of $2,839 million missed the Zacks Consensus Estimate of $2,876.1 million. The top line inched up 0.4% year over year, with passenger revenues accounting for 92.2% of the top line and increasing 0.1%.
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