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Kirby (KEX) Q2 Earnings & Revenues Surpass Estimates, Up Y/Y
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Kirby Corporation (KEX - Free Report) reported second-quarter 2024 earnings of $1.43 per share, which beat the Zacks Consensus Estimate of $1.32 and improved 50.5% year over year. Total revenues of $824.4 million surpassed the Zacks Consensus Estimate of $821.7 million and improved 6.1% year over year.
Total costs and expenses (on a reported basis) grew 2% year over year to $703.89million.
Kirby Corporation Price, Consensus and EPS Surprise
The company operates via two segments, namely, marine transportation, and distribution and services.
Revenues in the marine transportation unit improved 13.5% year over year to $484.8 million. Operating income came in at $94.9 million compared with $64.3 million in the year-ago quarter. Operating margin rose to 19.6% from 15% in the year-ago reported quarter.
In the inland market, average barge utilization was in the low to mid-90% range. Inland revenues increased 11% year over year owing to pricing. The inland market revenues accounted for 81% of segment revenues. Operating margin was in the low 20% range for the quarter.
In coastal, market conditions were strong during the quarter, with Kirby’s barge utilization in the mid to high-90% range. Coastal revenues increased 24% year over year, driven by better pricing and the return to service of one unit previously in the shipyard. Coastal revenues accounted for 19% of marine transportation segment revenues with an operating margin in the low teens range.
Distribution and services revenues for the second quarter were $339.6 million, down 3.1% year over year. Operating income for the reported quarter was $29.4 million compared with $29.8 million in the year-ago quarter. Operating margin rose to 8.7% from 8.5% in the second quarter of 2023.
In the power generation market, revenues improved 9% year over year owing to the constant demand for power and backup capabilities. Power generation revenues in industrial end markets were up 87% year over year while power generation revenues in oil & gas end markets were down due to equipment delays. Power generation revenues accounted for almost 32% of segment revenues. Operating margins were in the low double digits.
In the commercial and industrial market, revenues and operating income increased 9% and 38%, year over year, respectively. Higher business levels in marine repair were offset by lower activity in on-highway. Commercial and industrial revenues accounted for almost 49% of the segment’s revenues. Operating margins were in the high single digits.
In the oil and gas market, revenues and operating income increased 22% and 13% on a sequential basis, respectively, but declined year over year owing to lower levels of conventional oilfield activity, which resulted in decreased demand for new transmissions and parts partially offset by deliveries of e-frac equipment. Oil and gas revenues accounted for almost 19% of segment revenues. Operating margins were in the low to mid-single digits.
Balance Sheet Highlights & Cash Flow
As of Jun 30, 2024, Kirby had cash and cash equivalents of $53.5 million compared with $75.2 million at the prior-quarter end. Total debt was $1.048 billion at the second-quarter end compared with $1.060 billion at the end of the prior quarter.
Kirby repurchased 372,265 shares at an average price of $117.33 for $43.7 million in the second quarter.
In second-quarter 2024, Kirby generated $179.3 million of cash from operating activities. Capital expenditures were $88.6 million. Free cash flow was $42.3 million.
2024 Outlook
Under the Marine Transportation segment, for 2024, inland revenues are expected to grow in the high single to low double-digit range on a full-year basis. Operating margins are likely to continue to gradually improve during the year and average just more than 20% for the full year.
The company expects continued positive market dynamics with steady customer demand and limited new barge construction in the industry for the remainder of 2024. Further, many industry units are scheduled for maintenance. With these favorable market conditions, barge utilization rates are expected to remain in the low to mid-90% range throughout the remainder of the year.
Coastal revenues for the full year are anticipated to increase in the low double to mid-teens range on a year-over-year basis. Solid customer demand is anticipated throughout the year with barge utilization in the low to mid-90% range. Coastal operating margins are anticipated to average in the low double-digit range on a full-year basis.
For 2024, distribution and services segment revenues are anticipated to be flat to slightly down on a full-year basis, with operating margins in the mid to high-single digits but slightly lower year over year due to mix.
Net cash flow provided by operating activities is anticipated in the $600-$700 million band. Capital expenditures are expected to be between $300 and $330 million.
So far this year, shares of KEX have gained 40.1%, outperforming the industry’s growth of 17.9%.
Image Source: Zacks Investment Research
Performances of Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported second-quarter 2024 earnings (excluding 35 cents from non-recurring items) of $2.36 per share, which marginally missed the Zacks Consensus Estimate of $2.37. Earnings decreased 11.9% on a year-over-year basis. Apart from high costs, the carrier blamed the discounting pressure at the low end of the market, which hurt its pricing power, for the disappointing performance.
Revenues of $16.65 billion surpassed the Zacks Consensus Estimate of $16.25 billion and increased 6.9% year over year, driven by upbeat air travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $15.41 billion, up 5.4% year over year.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported disappointing second-quarter 2024 results wherein both earnings and revenues lagged the Zacks Consensus Estimate.
JBHT’s earnings of $1.32 per share missed the Zacks Consensus Estimate of $1.51 and declined 27% year over year.
JBHT’s total operating revenues of $2.93 billion missed the Zacks Consensus Estimate of $3.03 billion and fell 7% year over year. Total operating revenues, excluding fuel surcharge revenue, fell 6% year over year.The downfall was owing to a 5% decrease in gross revenue per load in Intermodal (JBI) and a decline in load volume of 25% in Integrated Capacity Solutions (ICS), 9% in Truckload (JBT), and 9% in Dedicated Contract Services (DCS). These were partially offset by the 5% revenue growth of Final Mile Services (FMS), primarily driven by new contracts implemented over the past year, and a 5% increase in revenue per load in ICS.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2024 earnings per share (excluding 18 cents from non-recurring items) of $4.14, which surpassed the Zacks Consensus Estimate of $3.97. Earnings decreased 17.7% on a year-over-year basis.
Operating revenues of $14.98 billion missed the Zacks Consensus Estimate of $15.13 billion. The top line increased 5.7% year over year due to upbeat air-travel demand. This was driven by a 5.2% rise in passenger revenues (which accounted for 91.2% of the top line) to $13.680 billion. Almost 44,375 passengers traveled on UAL flights in the second quarter, up 5.8% year over year.
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Kirby (KEX) Q2 Earnings & Revenues Surpass Estimates, Up Y/Y
Kirby Corporation (KEX - Free Report) reported second-quarter 2024 earnings of $1.43 per share, which beat the Zacks Consensus Estimate of $1.32 and improved 50.5% year over year. Total revenues of $824.4 million surpassed the Zacks Consensus Estimate of $821.7 million and improved 6.1% year over year.
Total costs and expenses (on a reported basis) grew 2% year over year to $703.89million.
Kirby Corporation Price, Consensus and EPS Surprise
Kirby Corporation price-consensus-eps-surprise-chart | Kirby Corporation Quote
Segmental Performance
The company operates via two segments, namely, marine transportation, and distribution and services.
Revenues in the marine transportation unit improved 13.5% year over year to $484.8 million. Operating income came in at $94.9 million compared with $64.3 million in the year-ago quarter. Operating margin rose to 19.6% from 15% in the year-ago reported quarter.
In the inland market, average barge utilization was in the low to mid-90% range. Inland revenues increased 11% year over year owing to pricing. The inland market revenues accounted for 81% of segment revenues. Operating margin was in the low 20% range for the quarter.
In coastal, market conditions were strong during the quarter, with Kirby’s barge utilization in the mid to high-90% range. Coastal revenues increased 24% year over year, driven by better pricing and the return to service of one unit previously in the shipyard. Coastal revenues accounted for 19% of marine transportation segment revenues with an operating margin in the low teens range.
Distribution and services revenues for the second quarter were $339.6 million, down 3.1% year over year. Operating income for the reported quarter was $29.4 million compared with $29.8 million in the year-ago quarter. Operating margin rose to 8.7% from 8.5% in the second quarter of 2023.
In the power generation market, revenues improved 9% year over year owing to the constant demand for power and backup capabilities. Power generation revenues in industrial end markets were up 87% year over year while power generation revenues in oil & gas end markets were down due to equipment delays. Power generation revenues accounted for almost 32% of segment revenues. Operating margins were in the low double digits.
In the commercial and industrial market, revenues and operating income increased 9% and 38%, year over year, respectively. Higher business levels in marine repair were offset by lower activity in on-highway. Commercial and industrial revenues accounted for almost 49% of the segment’s revenues. Operating margins were in the high single digits.
In the oil and gas market, revenues and operating income increased 22% and 13% on a sequential basis, respectively, but declined year over year owing to lower levels of conventional oilfield activity, which resulted in decreased demand for new transmissions and parts partially offset by deliveries of e-frac equipment. Oil and gas revenues accounted for almost 19% of segment revenues. Operating margins were in the low to mid-single digits.
Balance Sheet Highlights & Cash Flow
As of Jun 30, 2024, Kirby had cash and cash equivalents of $53.5 million compared with $75.2 million at the prior-quarter end. Total debt was $1.048 billion at the second-quarter end compared with $1.060 billion at the end of the prior quarter.
Kirby repurchased 372,265 shares at an average price of $117.33 for $43.7 million in the second quarter.
In second-quarter 2024, Kirby generated $179.3 million of cash from operating activities. Capital expenditures were $88.6 million. Free cash flow was $42.3 million.
2024 Outlook
Under the Marine Transportation segment, for 2024, inland revenues are expected to grow in the high single to low double-digit range on a full-year basis. Operating margins are likely to continue to gradually improve during the year and average just more than 20% for the full year.
The company expects continued positive market dynamics with steady customer demand and limited new barge construction in the industry for the remainder of 2024. Further, many industry units are scheduled for maintenance. With these favorable market conditions, barge utilization rates are expected to remain in the low to mid-90% range throughout the remainder of the year.
Coastal revenues for the full year are anticipated to increase in the low double to mid-teens range on a year-over-year basis. Solid customer demand is anticipated throughout the year with barge utilization in the low to mid-90% range. Coastal operating margins are anticipated to average in the low double-digit range on a full-year basis.
For 2024, distribution and services segment revenues are anticipated to be flat to slightly down on a full-year basis, with operating margins in the mid to high-single digits but slightly lower year over year due to mix.
Net cash flow provided by operating activities is anticipated in the $600-$700 million band. Capital expenditures are expected to be between $300 and $330 million.
Zacks Rank and Price Performance
Currently, Kirby carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
So far this year, shares of KEX have gained 40.1%, outperforming the industry’s growth of 17.9%.
Image Source: Zacks Investment Research
Performances of Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported second-quarter 2024 earnings (excluding 35 cents from non-recurring items) of $2.36 per share, which marginally missed the Zacks Consensus Estimate of $2.37. Earnings decreased 11.9% on a year-over-year basis. Apart from high costs, the carrier blamed the discounting pressure at the low end of the market, which hurt its pricing power, for the disappointing performance.
Revenues of $16.65 billion surpassed the Zacks Consensus Estimate of $16.25 billion and increased 6.9% year over year, driven by upbeat air travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $15.41 billion, up 5.4% year over year.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported disappointing second-quarter 2024 results wherein both earnings and revenues lagged the Zacks Consensus Estimate.
JBHT’s earnings of $1.32 per share missed the Zacks Consensus Estimate of $1.51 and declined 27% year over year.
JBHT’s total operating revenues of $2.93 billion missed the Zacks Consensus Estimate of $3.03 billion and fell 7% year over year. Total operating revenues, excluding fuel surcharge revenue, fell 6% year over year.The downfall was owing to a 5% decrease in gross revenue per load in Intermodal (JBI) and a decline in load volume of 25% in Integrated Capacity Solutions (ICS), 9% in Truckload (JBT), and 9% in Dedicated Contract Services (DCS). These were partially offset by the 5% revenue growth of Final Mile Services (FMS), primarily driven by new contracts implemented over the past year, and a 5% increase in revenue per load in ICS.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2024 earnings per share (excluding 18 cents from non-recurring items) of $4.14, which surpassed the Zacks Consensus Estimate of $3.97. Earnings decreased 17.7% on a year-over-year basis.
Operating revenues of $14.98 billion missed the Zacks Consensus Estimate of $15.13 billion. The top line increased 5.7% year over year due to upbeat air-travel demand. This was driven by a 5.2% rise in passenger revenues (which accounted for 91.2% of the top line) to $13.680 billion. Almost 44,375 passengers traveled on UAL flights in the second quarter, up 5.8% year over year.