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KIRBY CORP (KEX)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was a solid execution quarter with EPS of $1.67 and revenue of $855.5M, both modestly above consensus; EPS beat by $0.02 and revenue by ~$3.5M, driven by disciplined pricing, high utilization, and strength in Power Generation within Distribution & Services . Consensus EPS ($1.65*) and revenue ($851.9M*) from S&P Global.
  • Inland marine operated with low–mid 90% utilization and low-20% margins, while coastal margins advanced to high teens with near-100% term contract coverage and mid-20% price renewals, supported by limited large-vessel supply .
  • Management reiterated full-year EPS growth of 15–25% but flagged macro/tariff-driven softness in chemicals and supply-chain sourcing for power generation; if softness persists, results likely track to the lower end of the range .
  • Capital spending was lowered to $260–$290M (from $280–$320M) and free cash flow is tracking higher; absent M&A, management expects the majority of FCF to go to buybacks, reflecting balanced capital allocation .
  • Potential stock catalysts: resilient marine pricing/term renewals, accelerating Power Generation deliveries/backlog +15–20%, and capex cut/FCF-to-buybacks; watch for chemicals demand normalization and inland spot pricing moderation .

What Went Well and What Went Wrong

What Went Well

  • Inland and coastal pricing strength: inland spot rates increased low-single digits sequentially and mid-single digits YoY; coastal term renewals increased mid-20% YoY, pushing margins to low-20% (inland) and high teens (coastal) . “The combination of improved pricing and disciplined execution helped drive operating margins to the low 20% range.” — CEO David Grzebinski .
  • Power Generation outperformance: revenues +31% YoY and +35% QoQ, with backlog growth of ~15–20%; deliveries resumed as supply improved, margins creeping up on lean initiatives . “This power gen thing is real… we are not an AI play for sure, but we are benefiting.” — CEO .
  • Cost discipline/FCF and buybacks: EBITDA $202.2M; net cash from ops $94.0M; $31.2M buybacks at $94.01; capex lowered to $260–$290M, increasing FCF runway for repurchases absent acquisitions .

What Went Wrong

  • Macro/tariffs weighing on chemicals and Power Gen sourcing: management noted trade-policy shifts introducing planning complexity and demand softness in chemicals; inland utilization softened to low-90% entering Q3; spot pricing may face near-term pressure .
  • Inland navigational/lock delays constrained efficiency; Q2 delay days remained elevated (3,320), and management highlighted ongoing mariner shortage/inflation in labor .
  • Oil & Gas revenues -27% YoY on conventional frac softness (offset by e-frac deliveries); segment still mixed with customers maintaining capital discipline .

Financial Results

Consolidated Results vs Prior Periods and Consensus

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$802.3 $785.7 $855.5
Diluted EPS (GAAP, $)$0.74 $1.33 $1.67
Adjusted EPS (Non-GAAP, $)$1.29 N/AN/A
EBITDA ($USD Millions)$172.3 (Adj Q4) $174.3 $202.2
Operating Income ($USD Millions)$50.1 $105.5 $131.8
Net Cash from Operations ($USD Millions)$247.4 $36.5 $94.0
Capital Expenditures ($USD Millions)$96.7 $78.7 $71.5
Consensus Revenue* ($USD Millions)$803.7*$816.0*$851.9*
Consensus EPS* ($)$1.288*$1.278*$1.65*

Values marked with * retrieved from S&P Global.

Highlights:

  • Q2 2025 beat: EPS $1.67 vs $1.65* and revenue $855.5M vs $851.9M* .
  • Q1 2025: EPS beat ($1.33 vs $1.278*), revenue miss ($785.7M vs $816.0M*) .
  • Q4 2024: GAAP EPS impacted by one-time items (impairment and tax credit); adjusted EPS $1.29 matched consensus $1.288* .

Segment Breakdown

Segment MetricQ4 2024Q1 2025Q2 2025
Marine Transportation Revenue ($M)$466.8 $476.1 $492.6
Marine Operating Income ($M)$86.0 $86.6 $99.1
Marine Operating Margin (%)18.4% 18.2% 20.1%
Distribution & Services Revenue ($M)$335.5 $309.5 $362.9
D&S Operating Income ($M)$26.8 $22.6 $35.4
D&S Operating Margin (%)8.0% 7.3% 9.8%

KPIs

KPIQ4 2024Q1 2025Q2 2025
Inland Barge Utilization~90% range Low–mid 90% Low–mid 90%
Inland Spot RatesFlat/slightly down seq.; high-single-digit YoY Low-single-digit seq.; high-single-digit YoY Low-single-digit seq.; mid-single-digit YoY
Inland Term RenewalsHigh-single-digit YoY Mid-single-digit YoY Low–mid-single-digit YoY
Ton Miles (millions)3,220 3,329 3,659
Revenue/Ton Mile (cents)11.9 11.8 10.9
Delay Days2,681 4,029 3,320
Towboats Operated (avg)281 291 290
Average Fuel Cost ($/gal)$2.33 $2.57 $2.35
Coastal UtilizationMid–high 90% Mid–high 90% Mid–high 90%
Coastal Term Renewals YoYMid–high 20% Mid-20% Mid-20%
Barges (Active, Inland)1,094 1,111 1,109

Non-GAAP: EBITDA and Free Cash Flow reconciliations are provided in the press release/8-K .

Guidance Changes

MetricPeriodPrevious Guidance (Q1 2025)Current Guidance (Q2 2025)Change
Net Cash from Operations ($M)FY 2025$620–$720 $620–$720 Maintained
Capital Spending ($M)FY 2025$280–$320 $260–$290 Lowered
Inland RevenuesFY 2025Mid–high single-digit growth Low–mid single-digit growth Lowered
Inland Operating MarginFY 2025Gradual improvement; avg +200–300 bps vs Q1 (~around 20%) ~20% range, assuming no major disruptions Maintained/clarified
Coastal RevenuesFY 2025High-single to low-double digit increase High-single to low-double digit increase Maintained
Coastal Operating MarginFY 2025Mid-teens Mid–high teens; modest improvement H2 Raised
D&S Segment RevenuesFY 2025Flat to slightly down Flat to slightly up Raised
D&S Operating MarginFY 2025High-single digits, slightly lower YoY High-single digits Maintained
Inland Utilization (Q3 pace)Q3 2025N/ALow-90% expected New color
Capital AllocationFY 2025Majority of FCF to buybacks absent M&A Majority of FCF to buybacks absent M&A; FCF raised Reinforced

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Data center/Power Generation demandQ4: PG revenues +36% YoY; strong orders/backlog . Q1: backlog building; PG revenues down on delays but orders robust .Deliveries resumed; backlog up ~15–20%; strong inbound orders; lean/manufacturing improvements lifting margins .Accelerating demand; lumpy deliveries; backlog growing.
Supply chain (OEM lead times)Q1: supply delays pushed deliveries out .Ongoing extended OEM lead times; sourcing challenges from trade-policy shifts .Persistent constraint; partial improvement in Q2 deliveries.
Tariffs/MacroQ4/Q1: inflation/labor cost pressures; trucking recession bottoming .Trade-policy changes creating near-term softness in chemicals and sourcing; bias to lower end of EPS growth if persists .Macro uncertainty up; cautious H2 tone.
Petrochemical demand (inland)Q4: slight slowdown in some lanes; utilization ~90% . Q1: demand steady, utilization low–mid 90% .July softness emerging in chemicals; spot pricing may moderate; Q3 utilization low-90% .Softness vs early 2025; still constructive supply-side.
Coastal supply constraintsQ4/Q1: limited large vessels; term renewals mid–high 20% .Near-100% term contracts; high teens margins; shipyards winding down .Tight supply sustaining pricing/margins.
Labor/mariner constraintsQ1: acute mariner shortage driving costs .Inflationary labor pressures; mariner shortage persists .Ongoing headwind.
Oil & Gas e-frac shiftQ4: conventional weak; e-frac deliveries ongoing . Q1: O&G revenues -18% YoY; operating income +123% YoY on e-frac/cost actions .O&G revenues -27% YoY; operating income +182% YoY; e-frac bright spot .Continued mix shift to e-frac; profitability improving despite lower revenues.

Management Commentary

  • “We still expect 15 to 25% year-over-year growth in earnings for all of 2025… if the current softness persists, we will likely be closer to the lower end.” — CEO .
  • “Term contract renewals increased in the mid-20% range compared to a year ago… coastal operating margins [moved] to the high teens.” — CEO .
  • “Inland… pricing continued to show improvement… spot market prices and term contract renewals up… [driving] operating margins to the low 20% range.” — CEO .
  • “This power gen thing is real… we are not an AI play for sure, but we are benefiting… our backlog… jumped 15% to 20%.” — CEO .
  • “We like where our stock is… absent any acquisitions, [you] should see us continue to buy back our stock.” — CFO .

Q&A Highlights

  • Inland demand/chemicals: July saw chemicals volumes soften; Q3 utilization ~90%; management remains disciplined on pricing though spot may moderate .
  • Supply-side tightness and newbuild economics: inland barges delivered ~27 YTD vs ~35 retired — net decline; rates need another ~35–40% to justify newbuild economics (tow + barges) .
  • Coastal margins vs inland: coastal less exposed to chemicals (~10% vs ~60% inland), margins ramping on pricing and lower shipyard downtime; term coverage ~100% .
  • Capex and capital allocation: growth capex deferrals push some spend into 2026; FCF raised by ~$50M in the quarter; majority of FCF likely to buybacks absent M&A .
  • Power Generation cadence: deliveries resumed with lumpy profile; backlog growing; supply constrained by large-engine availability; domestic opportunities dominate .

Estimates Context

  • Q2 2025: EPS $1.67 vs $1.65*; revenue $855.5M vs $851.9M* — modest beat on both . Values retrieved from S&P Global.
  • Q1 2025: EPS $1.33 vs $1.278* — beat; revenue $785.7M vs $816.0M* — miss . Values retrieved from S&P Global.
  • Q4 2024: GAAP EPS $0.74 impacted by one-time items; adjusted EPS $1.29 aligned with consensus $1.288* . Values retrieved from S&P Global.

Implications:

  • Consensus likely needs to reflect inland spot moderation and chemicals softness, but Power Generation backlog strength and coastal pricing/term renewals provide offsetting support.
  • FY 2025 capex lowered and FCF trajectory improved may lead to higher buyback assumptions and potential upward revisions to FCF/share.

Key Takeaways for Investors

  • Pricing and utilization remain constructive across marine, with coastal margins stepping into high teens and inland steady around low-20% despite navigational delays and labor inflation .
  • Power Generation is a clear growth engine: resumed deliveries, backlog +15–20%, and structural demand (data centers/industrial) support multi-quarter momentum even with lumpy schedules .
  • Macro/tariff softness is the near-term swing factor: monitor chemicals demand, inland spot rates, and refinery crude slate mix (heavier imports favor barge demand) .
  • Capital allocation is investor-friendly: capex lowered to $260–$290M, FCF trending higher, and management intent to direct majority of FCF to buybacks absent M&A .
  • Supply-side tightness and limited newbuild economics (~35–40% additional rate uplift needed) underpin durable pricing/margins, particularly for coastal assets .
  • Near-term trading setup: modest beat, cautious macro tone, but strong coastal and Power Generation execution may bias downside protection; watch chemicals commentary and Q3 inland utilization trajectory .
  • Medium-term thesis: advantaged marine pricing power in constrained supply environment + Power Generation secular demand offers multi-year EPS/FCF compounding, with opportunistic M&A/buybacks as catalysts .