Kirby (KEX 3.08%), a leading U.S. tank barge operator and diversified industrial services provider, posted its latest earnings on July 31, 2025, covering the quarter. The company reported GAAP earnings per share of $1.67, just above analyst expectations of $1.66 (GAAP). Total GAAP revenue reached $855.5 million, surpassing GAAP consensus by $2.99 million. Both GAAP net earnings per share and revenue were higher than in Q2 2024. The quarter showed margin and topline improvement, but management took a more cautious tone for the remainder of 2025, noting trade and demand uncertainties. Overall, the period reflected disciplined execution despite signals of emerging softness in some markets.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $1.67 | $1.66 | $1.43 | 17% |
| Revenue (GAAP) | $855.5 million | $852.5 million | $824.4 million | 3.8% |
| Operating Margin (GAAP) | 15.4% | 14.6% | 0.8 pp | |
| EBITDA | $202.2 million | $182.9 million | 10.6% | |
| Free Cash Flow | $22.5 million | $90.7 million | (75.2%) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company Profile and Business Drivers
Kirby is the dominant operator in the U.S. tank barge sector, holding about 27% of the inland market as of December 31, 2024 and 11% of the coastal market as of December 31, 2024 through a fleet of over 1,100 inland and 28 coastal tank barges. Its operations span marine transportation of bulk liquids and a distribution and services unit that delivers industrial equipment repair and parts.
The company’s main success factors include scale in marine services, alignment with strict regulatory standards, and diversification into industrial equipment sales and servicing. Demand for products like petrochemicals and petroleum, tight shipyard capacity, and compliance with rules from the U.S. Coast Guard are key for ongoing performance. In recent years, initiatives have focused on upgrading vessel compliance, investing in ballast water systems, and balancing segment earnings through industrial and power generation projects.
Quarter Highlights: Financial and Operating Performance
The second quarter marked another period of performance slightly above consensus for both GAAP revenue and earnings per share. Revenue increased 3.8% compared to the prior year, while GAAP earnings per share advanced 17% year over year. EBITDA (non-GAAP) also climbed, supported by efficiency and steady customer volumes.
In the Marine Transportation segment, Marine transportation revenue rose 1.6% to $492.6 million compared to Q2 2024. Marine transportation operating income increased 4.4% compared to Q2 2024, with margins reaching 20.1% (GAAP), up from 19.6% (GAAP) in Q2 2024. The inland tank barge business (81% of the segment) maintained high barge utilization in the low to mid-90% range. Spot and term contract pricing both edged higher year-over-year. In the coastal segment (19% of segment revenue), utilization was in the mid to high-90% range, and term renewals climbed mid-20% from the prior year. However, Fuel costs per gallon dropped to $2.35 from $2.83 in Q2 2024.
Distribution and Services revenue saw broader improvement. Distribution and Services revenue was $362.9 million, up 6.9% compared to Q2 2024. This segment includes product lines such as power generation equipment, commercial and industrial engines, and oil and gas field service. Power generation revenue jumped 31% year-over-year on continued demand from data centers and manufacturing. The commercial and industrial group posted 5% revenue growth and a 24% increase in operating income. Oil and gas revenue fell 27% year-over-year due to weaker demand, but operating income rose sharply as the company focused on high-margin electric hydraulic fracturing (e-frac) equipment sales and cost management initiatives. Segment operating margin landed at 9.8%, up from 8.7% in Q2 2024. Management highlighted a mixed near-term picture for sales in this unit, with full-year 2025 revenues projected to be “flat to slightly up.”
Other notable financial developments included a sharp decline in free cash flow, down to $22.5 million from $90.7 million (non-GAAP) versus Q2 2024. Operating cash flow (GAAP) dropped by almost half to $94.0 million compared to Q2 2024, while GAAP capital expenditures decreased compared to Q2 2024. During the quarter, the company repurchased 331,900 shares for $31.2 million, citing continued capital discipline. Debt increased to $1,117.8 million as of June 30, 2025, raising the total debt-to-capitalization ratio to 24.8% as of June 30, 2025, from 20.7% at December 31, 2024. Liquidity stood at $68.4 million in cash and $331.5 million available overall as of June 30, 2025.
No significant one-time events were itemized for this report. However, navigation and lock delays, as well as elevated planned shipyard activity, constrained efficiency, particularly in the marine units. There was no update to dividend policy as the company continued its practice of not paying a dividend this quarter. KEX does not currently pay a dividend.
Business Model and Industry Dynamics
Kirby’s performance is tied closely to its marine transportation fleet and the regulatory landscape. The Jones Act, which restricts waterborne cargo shipments between U.S. ports to U.S.-built and -crewed vessels, protects the tank barge industry from foreign competition. Meeting requirements from the U.S. Coast Guard (USCG) and the American Bureau of Shipping (ABS) ensures fleet eligibility but comes with high compliance and upgrade costs. The company maintains its edge through ongoing investments.
Kirby’s fleet flexibility enables it to respond to swings in petrochemical and petroleum product demand. Many barges can be switched between carrying chemicals and refined products, providing resilience when individual markets shift. The industry is marked by high steel prices, making it costly to build new barges—currently about $4.7 million for a 30,000-barrel model, as stated by management in Q1 2025. This cost, alongside ongoing labor shortages for mariners, limits rapid fleet expansion. Orders observed in the sector remain largely for replacement rather than growth, suggesting fleet numbers will remain flat or decline in 2025.
Looking Forward: Guidance and Watch Points
For fiscal 2025, management reiterated guidance for 15% to 25% earnings per share growth in FY2025. However, its commentary shifted to a more cautious stance, warning that continued softness in short-term demand or extended trade challenges could result in outcomes “closer to the lower end” of the prior full-year EPS growth guidance range of 15% to 25% for 2025. Marine transportation, especially inland barge utilization, is expected to dip into the low 90% range in Q3 2025. Segment margins are projected to stabilize around 20% inland and in the mid-to-high teens for coastal operations in Q2 2025.
In Distribution and Services, leadership expects FY2025 revenue to be flat or up slightly, with operating margin in the “high single digits.” Longer OEM lead times, trade policy developments, and labor inflation are all highlighted as ongoing challenges. Liquidity remains solid, but the sharp contraction in free cash flow (non-GAAP) and the increased debt-to-capitalization ratio in Q2 2025 are watch points for capital allocation, future acquisitions, and elevated capital expenditures.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
