This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Kirby Corporation's CEO Announces Revisions To Q2 2012 Guidance - Guidance Call Transcript

I will now turn the call over to Joe.

Joe Pyne

Okay, thank you Steve. On Friday afternoon, we publicly revised and lowered our second quarter guidance to $0.80 to $0.85 per share from the previous guidance of $0.97 to $1.02 per share. For the year, we revised our guidance to $3.45 to $3.70 per share, again from the previous guidance of $3.85 to $4.05 per share.

Let me start with some comments on our inland tank barge and marine diesel engine service businesses, both of which are performing well and above 2011 second quarter levels. Our inland tank barge market remains strong with equipment utilization levels in the 90 to 95% range, leading to continued favorable pricing trends. During the second quarter, we did see some temporary lower petrochemical volumes than anticipated from one of our major customers due to both unscheduled and scheduled plant maintenance issues. We also experienced some low water levels on the Mississippi River system which has led us to light load equipment going upriver and resulted again in some lower revenue.

Looking forward, we anticipate our inland market to remain positive based on the high utilization levels in the industry’s tank barge fleet. We are currently hearing a lot about inventory destocking caused by the collapse in crude oil pricing and the global economic weakness, but this has not translated into reducing utilization and the industry capacity additions are all being absorbed.

With respect to our marine diesel engine service market, it continues to improve due to the overall health of its inland marine transportation customers, improving Gulf of Mexico oil service markets, and the power generation market which we participate in is also stable. We anticipate these businesses to remain positive for the second half of 2012.

Our challenges for the second quarter and for the year are principally in our newly acquired businesses. With respect to United Holdings and K-Sea Transportation, now Kirby Offshore Marine, I want to emphasize that although we’re disappointed with this year’s performance, we’re not disappointed in the land-based diesel engine service business opportunity and the offshore tank business as investments for Kirby long-term. When we purchased United Holdings last April, we recognized that it had some cyclical exposure to manufacturing. We said that we intended to reduce this exposure by focusing on the overhaul and maintenance of this equipment versus manufacturing the equipment. What we did not predict was the unprecedented and sudden collapse of natural gas prices, which has essentially halted new orders for frac spreads and reduced the window to make the transition to re-man. Frankly, we didn’t predict the strength of this business last year. Although painful, it has forced us to expedite the implementation of our remanufacturing plan.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs