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KIRBY CORP (KEX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered $802.3M revenue (+0.4% YoY, -3.5% QoQ) and GAAP EPS of $0.74; adjusted EPS of $1.29 excluded a $56.3M inventory impairment and a $10.9M Louisiana tax law credit .
  • Marine Transportation remained the growth engine: revenue +3% YoY with operating margin rising to 18.4% (from 15.1% LY), while Distribution & Services (D&S) softened (revenue -3% YoY, 8.0% margin) amid oil & gas weakness .
  • 2025 guide calls for EPS growth of 15–25% YoY, inland margins +200–300 bps for the year, coastal margins in the mid-teens, and operating cash flow of $620–$720M with capex of $280–$320M (lower vs. 2024) .
  • Cash generation was strong: Q4 adjusted EBITDA $172.3M; operating cash flow $247.4M; free cash flow $150.7M; $105M of debt repaid and $33.3M of buybacks executed in Q4 .
  • Key narrative for 2025: tight supply, limited newbuilds, high utilization, and term renewals support pricing in inland/coastal; D&S power gen strength offsets oil & gas softness—setup seen as favorable for margin expansion and EPS growth .

What Went Well and What Went Wrong

What Went Well

  • Inland and coastal pricing/margins: Inland operating margins ~20% (segment 18.4%) with high-single-digit term renewals; coastal term renewals up mid-to-high 20% YoY and low-teens operating margin despite shipyards .
  • Robust cash generation and deleveraging: Q4 operating cash flow $247.4M; free cash flow $150.7M; debt reduced by $105M; liquidity $582.6M; debt-to-cap down to 20.7% .
  • Management confidence for 2025: “we expect…15–25% year-over-year growth in earnings per share” and inland margin up 200–300 bps; coastal mid-teens margins for the year .

Selected quotes:

  • “Adjusted earnings for the quarter were $1.29 per share.”
  • “We are very tight in terms of supply and demand right now… that… drives pricing.”
  • “Our barge utilization is strong and we are realizing strong rate increases… very favorable outlook for our business as we look into the coming year.”

What Went Wrong

  • One-time impairment hit GAAP: $56.3M non-cash impairment tied to conventional diesel frac equipment as the market shifts toward e-frac; partially offset by $10.9M deferred tax credit .
  • Seasonal/operational headwinds: Q4 saw weather/lock delays (delay days +30% QoQ) and typical seasonal D&S weakness; coastal shipyards tempered quarterly revenues/margins .
  • D&S oil & gas weakness: Oil & gas revenues -38% YoY with mid-to-high single-digit margins; management expects 2025 O&G revenues down high-single to low-double digits as shift to e-frac continues .

Financial Results

Consolidated P&L Snapshot (YoY and QoQ context, estimates unavailable)

MetricQ4 2023Q2 2024Q3 2024Q4 2024vs. Est.
Revenue ($M)$799.2 $824.4 $831.1 $802.3 N/A (S&P Global consensus unavailable)
GAAP Diluted EPS ($)$1.04 $1.43 $1.55 $0.74 N/A (S&P Global consensus unavailable)
Adjusted EPS ($)———$1.29 (ex-impairment/tax) N/A (S&P Global consensus unavailable)
Operating Income ($M)$92.8 $120.5 $126.9 $50.1 N/A (S&P Global consensus unavailable)

Note on estimates: Wall Street consensus from S&P Global was not retrievable at this time due to access limits; please advise if you’d like us to refresh when available.

Segment Performance

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Marine Transportation Revenue ($M)$452.6 $484.8 $486.1 $466.8
Marine Operating Income ($M)$68.2 $94.9 $99.5 $86.0
Marine Operating Margin (%)15.1% 19.6% 20.5% 18.4%
D&S Revenue ($M)$346.6 $339.6 $345.1 $335.5
D&S Operating Income ($M)$28.7 $29.4 $30.4 $26.8
D&S Operating Margin (%)8.3% 8.7% 8.8% 8.0%

Cash Generation

MetricQ3 2024Q4 2024
EBITDA / Adjusted EBITDA ($M)$190.5 $172.3 (Adjusted)
Operating Cash Flow ($M)$206.5 $247.4
Capital Expenditures ($M)$76.4 $96.7
Free Cash Flow ($M)$130.1 $150.7
Net Share Repurchases ($M)$55.8 $33.3
Debt Reduction ($M)—$105.0

Marine KPIs (Inland)

KPIQ4 2023Q2 2024Q3 2024Q4 2024
Ton Miles (MM)3,340 3,330 3,135 3,220
Revenue/Ton Mile (cents)11.2 11.8 12.5 11.9
Towboats Operated (avg)281 287 287 281
Delay Days2,873 3,334 2,061 2,681
Avg Fuel Cost ($/gal)3.41 2.83 2.65 2.33
Inland Tank Barges (count)—1,093 1,095 1,094

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
EPS GrowthFY 2025—+15% to +25% YoY New
Inland UtilizationFY 2025—Low-to-mid 90% avg New
Inland RevenueFY 2025—Mid-to-high single-digit growth New
Inland Operating MarginFY 2025Up 200–300 bps vs ’24 (call commentary) Up 200–300 bps (Q1 lowest) Maintained
Coastal RevenueFY 2025—High-single to low-double digit growth New
Coastal Operating MarginFY 2025Up ~300 bps vs ’24 (call commentary) Mid-teens (Q1 lowest) Maintained
D&S RevenueFY 2025—Flat to slightly down New
D&S Operating MarginFY 2025—High-single digits, slightly lower YoY New
Operating Cash FlowFY 2025$600–$700M (FY24 guide) $620–$720M Raised vs FY24 base
Capital ExpendituresFY 2025$325–$355M (FY24 guide) $280–$320M Lowered
Maintenance CapexFY 2025$200–$240M (FY24 guide) $180–$220M Lowered
Growth CapexFY 2025~$115M (FY24 guide) Up to ~$100M Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Supply/demand & pricing (inland)Spot up low-to-mid single digits seq., low double-digit YoY; term renewals high-single digits Q4 spot flat to slightly down seq., high-single-digit YoY; term renewals high-single digits; tight supply Tight market persists; brief Q4 “speed bump,” pricing momentum intact
Coastal dynamicsTerm renewals high-20% YoY; mid-teens margins; near sold-out Term renewals mid-to-high 20% YoY; 100% termed; low-teens margin in Q4 due to shipyards Very tight; shipyards create near-term margin dip
Inflation & mariner shortagePersistent inflation; higher newbuild costs; labor tightness Ongoing wage/equipment/yard inflation; supports rate increases Inflationary backdrop continues; supports pricing
Power generation (data centers)Strong orders; supply delays; backlog growing Revenues +36% YoY; backlog in “hundreds of millions”; 1 GW milestone pending; lumpy deliveries Strengthens; deliveries expected to be lumpy
Oil & gas (e-frac vs. conventional)E-frac growth; conventional weak Revenues -38% YoY; shift to e-frac continues; 2025 revenues down HSD–LDD Conventional remains weak; strategic pivot to e-frac
Seasonality & weatherQ3 hurricanes/lock delays; Q4 seasonal softness expected Q4 navigational/weather challenges; Q1 usually trough Seasonal headwinds consistent with history
Newbuild economics & fleetNew 30k bbl barge ~$4.5M; replacement-focused build; orderbook modest Need ~40% higher rates to justify new inland capacity; 2025 inland barge orders ~50–60, largely replacement Supply discipline remains; long runway for tightness

Management Commentary

  • Strategy and outlook: “All in all, we have a very favorable outlook for our business as we look into the coming year.”
  • Inland/coastal pricing: “We are very tight in terms of supply and demand right now… that… drives pricing.”
  • Cost pressures support pricing: “Shipyards… have the same labor constraints… anything electronic, we’ve seen inflation… we need the pricing to continue to march up to offset some of that inflation.”
  • Newbuild economics: “Spot pricing is well above term… to justify building new equipment… a 2 barge tow would need… ~$14,000 a day.”
  • Power generation: “Power gen is a real thing. The data center demand is real… backlog… in the hundreds of millions… we will hit the milestone of delivering 1 gigawatt of natural gas power generation products.”

Q&A Highlights

  • Pricing and utilization: Q4 spot dipped 0–2% but recovered in January; inland utilization reached 95–97% at times, effectively sold out; term renewals high-single digits .
  • Inflation/wages: Industry-wide mariner tightness and yard/equipment inflation persist; management expects pricing to offset inflation; inland margin up 200–300 bps for 2025 .
  • Tariffs/refinery closure: Tariffs could spur onshoring and support demand; closure of a Houston refinery likely re-routes flows and can increase ton-miles; net impact manageable .
  • Newbuild & orderbook: Inland rates need ~+40% to justify new capacity; 2025 orderbook ~50–60 barges (largely replacement), with capacity constraints pushing any incremental orders into 2026 .
  • Power gen backlog: Backlog in “hundreds of millions,” lumpy delivery profile; milestone 1 GW of natural gas power generation deliveries expected this year .

Estimates Context

  • We attempted to retrieve S&P Global consensus for revenue/EPS/EBITDA to compare against Q4 results; data was unavailable due to access limits at the time of request. Please advise if you’d like us to refresh when access is restored for explicit beat/miss quantification.
  • Given the qualitative setup (tight supply, renewal pricing, high utilization), street models likely need to reflect: (1) 2025 inland margin expansion of +200–300 bps, (2) coastal mid-teens margins with Q1 trough, and (3) D&S power generation growth offsetting oil & gas declines in aggregate flat-to-down revenues with high-single digit margins .

Key Takeaways for Investors

  • Tight supply + disciplined newbuilds create multi-year pricing power; inland and coastal fundamentals remain favorable, supporting margin expansion through 2025 and beyond .
  • 2025 guide looks constructive: EPS +15–25%, inland margins +200–300 bps, coastal mid-teens, underpinning stronger earnings and cash generation even with seasonal Q1 trough .
  • Free cash flow engine accelerating: $150.7M FCF in Q4 and $414M in 2024; 2025 operating cash flow guided to $620–$720M with lower capex, enabling continued buybacks and debt paydown .
  • D&S pivot continues: power generation demand (data centers/backup power) and natural gas power solutions offset ongoing conventional oil & gas softness; deliveries remain lumpy .
  • Watch catalysts: inland spot/term pricing trajectory through renewal season, coastal shipyard cadence (Q1 headwind), execution on power gen backlog, and any material shifts in refinery utilization or tariff policy .
  • Risks: seasonal weather/lock delays, persistent inflation (labor, yards, electronics), and prolonged oil & gas weakness pressuring D&S mix .