The following is a summary of the Kirby Corporation (KEX) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Kirby Corporation reported a solid Q3 with earnings per share rising from $1.05 in 2023 Q3 to $1.55 in 2024 Q3, a significant 48% year-over-year increase.

• Total revenues rose 9% year-over-year, aided by gains in pricing and solid execution across both Marine Transportation and Distribution and Services despite some headwinds.

• The company generated over $130 million in free cash flow during the quarter, using it to strengthen the balance sheet by paying down $70 million in debt and buying back $56 million in stock.

Business Progress:

• In Marine Transportation, inland revenues rose by 11% with margins in the low-20% range, while coastal revenues jumped 23% with mid-teens operating margins due to strong customer demand and limited large capacity vessel availability.

• Distribution and Services experienced revenue growth in sectors like power generation, though it was partially offset by softer results in oil and gas. Notably, revenues in power generation, particularly tied to industrial end markets, have increased significantly year-over-year.

Opportunities:

• Kirby sees continued strong demand for power generation products and services, notably from data centers and other industrial applications, with significant orders contributing to a growing backlog. This trend is bolstered by global shifts towards more reliable and extensive power solutions, positioning the company to capitalize on increasing market needs for their power generation capabilities.

Risks:

• The fourth quarter outlook hints at potential disruptions due to maintenance cycles in coastal marine operations and ongoing supply chain issues in power generation which could delay product deliveries. Additionally, the inland segment might experience flat to slightly reduced revenues in Q4 due to normal seasonality and operational hurdles, such as increased maintenance and labor costs emerging from a tight labor market.

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