Kirby Corp. reported record first-quarter profits Thursday thanks largely to a strong inland tank barge market with prices back up to 2008 levels.
Houston-based Kirby, the nation’s largest domestic tank barge operator, earned $50.9 million on revenue of $566.9 million versus earnings of $32.4 million on revenue of $299.4 million for the same quarter last year.
Kirby also said it changed the name of its K-Sea Transportation Partners unit to Kirby Offshore Marine and will close K-Sea’s East Brunswick, N.J., offices and consolidate operations in Staten Island, N.Y.
Kirby CFO David Grzebinski was named chairman of the coastwise petroleum transportation company, which Kirby acquired last July in a deal valued at $600 million. Kirby Inland Marine executive Jim Farley will be president.
“The coastal market is not a next quarter story,” Kirby CEO Joe Pyne told analysts as the company cited a string of reasons for “slightly above breakeven results,” including reduced demand because of an unseasonably mild Northeast winter. Utilization rates were in the 75-80 percent range compared to the low- to mid-90 percent range for inland tank barges. Pyne said he expected results from the former K-Sea to improve over the next couple of years.
Asked whether inland barge charter prices had peaked, Pyne said, “We’re back to levels we were at in 2008.We think the pricing environment continues to be favorable, and we think over the next year or two that’s likely to be sustainable.”
The largest variable in the results related to another 2011 acquisition, United Holdings, which expanded Kirby’s diesel engine service segment and moved it into the onshore oil and gas business. Lower natural gas prices have affected United, which makes oilfield service equipment including the type used in hydraulic fracturing.
Pyne said Kirby would continue to build now “more heavily focus on servicing this equipment rather than manufacturing it.”
Kirby shares jumped 4 percent on the news Thursday, closing at 66.33. Volume was over 1.4 million shares, well above its daily average of 426,000 shares.