Kirby Corp. Records Solid Results

Kirby Corp. has apparently had success incorporating Hollywood Marine, a move which effectively created the largest inland barge operator in the country. In February, the company reported earnings per share (EPS) of $0.38, versus $0.31 a year ago. While the company appears strong, poised for further growth, there are some concerns as noted in a research report from Lazard Freres & Co. LLC. Management expects the slowing U.S. economy to negatively impact transportation volumes, particularly for chemicals, as those customers project reduced demand for the year. First quarter results will also undoubtedly be touched by severe weather conditions common in the Midwest in January. For the fourth quarter 2000, marine transportation revenue increased 4.2% to $110.4 million from $106 million in 4Q99. Operating margins expanded to 18.7% from 16.9% in 4Q99, and up modestly from 18.6% in 3Q00, reflecting synergies of the integration of Kirby and Hollywood. Diesel repair revenue was essentially flat at $16.5 million compared with $16.6 million in 4Q99. Although operating margin improved to 8.8% from 8%, it declined sequentially from the 9.6% registered in 3Q00. Strengthening of the Gulf of Mexico business was not enough to offset weaknesses on the East and West Coasts. However, management is optimistic that this segment will improve results in 2001, driven by a bounce-back in the offshore oil service business, which is currently growing 10 to 15%. The company expects to spend $55 to $60 million on capital expenditures in 2001, an increase due in large to orders for 11 new barges at an average price of $1.7 to $1.8 million. Kirby ordered six asphalt barges in November 2000, and another five in January 2001 in response to customer demand. The newbuilds add to the current fleet of 50 black oil barges, including 28 dedicated to asphalt transportation.