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Kirby (KEX) Loses 13% in a Year: What's Dragging It Down?

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Shares of Kirby Corporation KEX have lost 13% against the industry's 16.1% decline in a year’s time. The disappointing performance was caused by weakness in the oil and gas market as well as ramped down activity in coal transportation business.

Let’s discuss the factors hurting the stock.

Dismal performance of the oil and gas market caused a 16% decline in the company’s distribution and services revenues in 2019. The headwind is anticipated to persist in 2020, which is likely to lower revenues at the distribution and services in the range of 12-17%.

Also, reduced activity in coal transportation business is likely to dent coastal revenues (part of the broader marine transportation segment’s revenues) in 2020. Consequently, coastal revenues are anticipated to be either flat or up slightly year over year.

Moreover, the company’s high debt levels are concerning. Evidently, debt to capitalization ratio, a measure of financial leverage, exceeded 28% at the end of fourth quarter, 2019.

Negative Estimate Revisions and Zacks Rank

Investors’ pessimism revolving around the stock is evident from the Zacks Consensus Estimate for 2020 earnings being revised downward by 13.9% in the past 60 days to $3.03.

Kirby carries a Zacks Rank #4 (Sell).

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