Kirby Corporation has announced record net earnings for the third quarter ended September 30, 2011 of $52.7 million, or $.94 per share, compared with $30.7 million, or $.57 per share, for the corresponding period last year.
Consolidated revenues for the 2011 third quarter were a record $563.6 million compared with $281.3 million in 2010.
Commenting on the results,
Joe Pyne, Kirby’s Chairman and Chief Executive Officer, said: “Our record third quarter results were a reflection of strong United States petrochemical production levels, stable refinery production levels, and a continued strong exportation market, all leading to high inland tank barge utilization levels and favorable term and spot contract pricing.
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K-Sea Transportation Partners LLC, our coastwise and local transportation company acquired on July 1, 2011, was accretive to our third quarter operating results, but, as anticipated, K-Sea’s operating results were offset by acquisition related expenditures, and higher interest expense and common shares outstanding associated with the acquisition.”
Mr. Pyne continued, “Our record third quarter results also reflected record earnings from
United Holdings LLC, our land-based distributor and service provider of engine and transmission related products and manufacturer of oilfield service equipment acquired on April 15, 2011. United’s operating results reflected a continued strong market for the manufacturing of hydraulic fracturing equipment and the sale and service of transmissions and engines.”
Kirby reported record net earnings attributable to Kirby for the 2011 first nine months of $126.9 million, or $2.33 per share, compared with $84.6 million, or $1.56 per share, for the first nine months of 2010. Consolidated revenues for the 2011 first nine months were a record $1.3 billion compared with $823.2 million for the first nine months of 2010.
Segment Results – Marine Transportation
Marine transportation revenues for the 2011 third quarter were $351.2 million, a 51 percent increase compared with the 2010 third quarter. Operating income was $78.1 million, 52 percent higher than in 2010.
The positive third quarter results reflected increased production volumes by United States petrochemical producers for both domestic and foreign destinations, benefiting from low natural gas prices and its impact on the global competitiveness of the United States petrochemical industry. As a result, Kirby’s inland petrochemical fleet was close to fully utilized, operating in the low to mid 90 percent utilization levels.
Kirby’s black oil products fleet also operated at close to full utilization levels, benefiting from stable United States refinery production levels, the exportation of heavy fuel oils and demand for the transportation of crude oil principally from the Eagle Ford shale formations in South Texas and from the Midwest to the Gulf Coast.
The strong utilization levels in both the petrochemical and black oil products fleets led to higher term and spot contract pricing during the quarter. Diesel fuel prices for the 2011 third quarter increased 51 percent compared with the 2010 third quarter, thereby positively impacting marine transportation revenues since fuel price increases are covered by fuel escalation and de-escalation clauses in term contracts.
The higher marine transportation revenues and operating income also reflected the acquisition of K-Sea effective July 1, 2011, generating approximately 20 percent of the marine transportation segment’s 2011 third quarter revenues. K-Sea’s coastwise and local fleet utilization level, primarily from the transportation of refined petroleum products, averaged in the 75 to 80 percent range.
The marine transportation operating margin for the 2011 third quarter was 22.2 percent compared with 22.1 percent for the third quarter of 2010, reflecting the strong petrochemical and black oil products demand, strong equipment utilization levels and higher term and spot contract pricing, partially offset by a lower K-Sea operating margin and the cost impact of higher diesel fuel prices.
