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Kirby (KEX) Up 2.2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Kirby (KEX - Free Report) . Shares have added about 2.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Kirby due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat at Kirby in Q3
Quarterly earnings of 65 cents per share outpaced the Zacks Consensus Estimate of 60 cents and improved more than 100% year over year. Total revenues of $745.8 million missed the Zacks Consensus Estimate of $748.4 million. However, the top line improved 25% year over year on the back of higher revenues in the marine transportation and distribution and services segments. Total costs and expenses (on a reported basis) declined 24.9% year over year to $686.94 million.
Segmental Performance
In the third quarter, revenues in the marine transportation unit increased 27.9% year over year to $433.04 million. Segmental operating income jumped to $41.7 million in the reported quarter compared with $16.9 million in the year-ago period. Operating margin improved to 9.6% compared with 5% in the year-ago period.
Inland market revenues accounted for 80% of the segmental revenues. Revenues in the inland market grew 35% year over year, owing to increased volumes, barge utilization, pricing and fuel rebills. The operating margin for the inland business improved in the low double digits despite ongoing headwinds from high fuel costs and inflationary pressures.
Revenues in the coastal market grew 6% year over year and accounted for 20% of the segmental revenues. The coastal market recorded an improvement in operating margin in the low-to-mid single digits during the quarter. Average barge utilization in the September quarter was in the low-90% range.
In the distribution and services segment, revenues rose 20.1% to $312.80 million. Segmental operating income jumped to $22.3 million in the reported quarter compared with $11 million in the year-ago period. Moreover, the segment reported an operating margin of 7.1% in the third quarter of 2022 compared with 4.2% in third-quarter 2021.
The commercial and industrial sub-group, which accounted for 53% of the segmental revenues, benefited from strong economic activity across the United States, which resulted in higher business levels in marine repair, power generation and on-highway. The operating margin at the commercial and industrial sub-group was in the high-single digits.
The oil and gas sub-group, which accounted for 47% of the segmental revenues during the reported quarter, benefited from higher oilfield activity, resulting in increased demand for new transmissions and parts in the distribution business. The segment had an operating margin in the mid-single digits.
Balance Sheet Highlights
As of Sep 30, 2022, Kirby had cash and cash equivalents of $37 million compared with $25.1 million at the end of June 2022. Total debt was $1,118.5 million at the end of the third quarter compared with $1,136.1 million at the end of June 2022.
During the reported quarter, KEX generated $65.6 million of net cash from operating activities, and capital expenditures came in at $41.2 million. Free cash flowwas $24.4 million.
2022 Outlook
Kirby anticipates net cash generated from operating activities between $390 million and $450 million. Free cash flow is expected in the range of $200-$280 million in 2022. Kirby anticipates capital expenditures in the range of $170-$190 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -13.51% due to these changes.
VGM Scores
At this time, Kirby has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Kirby has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Kirby (KEX) Up 2.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Kirby (KEX - Free Report) . Shares have added about 2.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Kirby due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat at Kirby in Q3
Quarterly earnings of 65 cents per share outpaced the Zacks Consensus Estimate of 60 cents and improved more than 100% year over year. Total revenues of $745.8 million missed the Zacks Consensus Estimate of $748.4 million. However, the top line improved 25% year over year on the back of higher revenues in the marine transportation and distribution and services segments. Total costs and expenses (on a reported basis) declined 24.9% year over year to $686.94 million.
Segmental Performance
In the third quarter, revenues in the marine transportation unit increased 27.9% year over year to $433.04 million. Segmental operating income jumped to $41.7 million in the reported quarter compared with $16.9 million in the year-ago period. Operating margin improved to 9.6% compared with 5% in the year-ago period.
Inland market revenues accounted for 80% of the segmental revenues. Revenues in the inland market grew 35% year over year, owing to increased volumes, barge utilization, pricing and fuel rebills. The operating margin for the inland business improved in the low double digits despite ongoing headwinds from high fuel costs and inflationary pressures.
Revenues in the coastal market grew 6% year over year and accounted for 20% of the segmental revenues. The coastal market recorded an improvement in operating margin in the low-to-mid single digits during the quarter. Average barge utilization in the September quarter was in the low-90% range.
In the distribution and services segment, revenues rose 20.1% to $312.80 million. Segmental operating income jumped to $22.3 million in the reported quarter compared with $11 million in the year-ago period. Moreover, the segment reported an operating margin of 7.1% in the third quarter of 2022 compared with 4.2% in third-quarter 2021.
The commercial and industrial sub-group, which accounted for 53% of the segmental revenues, benefited from strong economic activity across the United States, which resulted in higher business levels in marine repair, power generation and on-highway. The operating margin at the commercial and industrial sub-group was in the high-single digits.
The oil and gas sub-group, which accounted for 47% of the segmental revenues during the reported quarter, benefited from higher oilfield activity, resulting in increased demand for new transmissions and parts in the distribution business. The segment had an operating margin in the mid-single digits.
Balance Sheet Highlights
As of Sep 30, 2022, Kirby had cash and cash equivalents of $37 million compared with $25.1 million at the end of June 2022. Total debt was $1,118.5 million at the end of the third quarter compared with $1,136.1 million at the end of June 2022.
During the reported quarter, KEX generated $65.6 million of net cash from operating activities, and capital expenditures came in at $41.2 million. Free cash flowwas $24.4 million.
2022 Outlook
Kirby anticipates net cash generated from operating activities between $390 million and $450 million. Free cash flow is expected in the range of $200-$280 million in 2022. Kirby anticipates capital expenditures in the range of $170-$190 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -13.51% due to these changes.
VGM Scores
At this time, Kirby has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Kirby has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.