Kirby Corp. hit five-year lows yesterday after the Houston-based tank barge operator reported fourth-quarter earnings that missed the analysts’ consensus estimate by 3 cents a share

Kirby announced net earnings for the quarter ended Dec. 31 of $50.7 million, or 94 cents per share, compared with $68.1 million, or $1.19 per share, for the 2014 fourth quarter. Kirby reported 2015 net earnings of $226.7 million, or $4.11 per share, compared with $282 million, or $4.93 per share, for 2014.

David Grzebinski, Kirby’s president and CEO, said demand for its marine transportation and diesel engine business was affected by the price volatility and lower prices of commodities. The company’s inland tank barge utilization dipped into the high-80% range for short periods during the quarter. “We continued to face a competitive inland marine environment which led to both lower spot pricing and lower pricing on term contracts that renewed,” Grzebinski said in a statement. Pricing for the company’s coastal marine transportation equipment held up well, although Kirby continued to see a decline in the percentage of equipment under term contract.

“Customer demand has held up relatively well and the market continues to absorb barges coming out of crude service,” Grzebinski told analysts during yesterday’s conference call with analysts. “That said, volume has been less robust than we would expect in a healthy growing economy.”

Grzebinski summed up the market and provided an outlook on the rest of the year. “The outlook for our markets is more opaque right now than it has been in many years. Economists tell us that GDP in the U.S. continues to grow, but the source of that growth is not clear. Perhaps the consumer economy is doing okay, but there is a depression in the energy economy. And it feels like there is a general malaise, if not a recession looming in the industrial and manufacturing economies.

“While we entered 2016 with an uncertain outlook and a number of market challenges, our 2016 guidance anticipates another year-over-year increase in free cash flow that combined with our already strong balance sheet positions us well to take advantage of high-return opportunities that are often available in these difficult markets.”

Marine transportation revenues for the fourth quarter were $399.8 million compared with $429.4 million for the 2014 fourth quarter. Kirby said the revenue drop was mainly driven by a 41% decline in the average price of marine diesel fuel, which is passed through to our customers. Revenue was also affected by an increase in inland marine delay days, lower pricing and an increase in available spot market days for certain offshore marine equipment.

Tank barge utilization was in the high-80% to low-90% range in the fourth quarter. Demand for tank barge transportation of petrochemicals, refined petroleum products and black, excluding crude oil, was stable, while the demand for barges moving crude oil and condensate was lower. Also affecting operations were flooding and strong currents on parts of the Gulf Intracoastal Waterway, as well as the closure of two major locks throughout the first half of November and high water on the Mississippi River System in December. These conditions contributed to a 15% year-over-year increase in delay days. 

Demand for the coastal marine transportation of refined petroleum products, black oil, and petrochemicals was stable, although demand for equipment for crude oil transportation declined sequentially and year-over-year. 

David Krapf has been editor of WorkBoat, the nation’s leading trade magazine for the inland and coastal waterways industry, since 1999. He is responsible for overseeing the editorial direction of the publication. Krapf has been in the publishing industry since 1987, beginning as a reporter and editor with daily and weekly newspapers in the Houston area. He also was the editor of a transportation industry daily in New Orleans before joining WorkBoat as a contributing editor in 1992. He has been covering the transportation industry since 1989, and has a degree in business administration from the State University of New York at Oswego, and also studied journalism at the University of Houston.