Snapshot
Kirby Corp reported $871M of revenue in Q3 2025, up 4.8% year over year, with diluted EPS of $1.65 and an operating margin of 14.8%.
- Revenue
- $871M
- YoY growth
- +4.8%
- Diluted EPS
- $1.65
- Operating margin
- 14.8%
What management said
- •A slide presentation for today's conference call as well as the earnings release which was issued earlier today can be found on our website.
- •Earlier today we announced third quarter earnings per share of $1.65, a 6% increase year-over-year.
- •In the third quarter, we delivered steady results in total, driven by robust customer demand in power generation and disciplined operational execution across all of our businesses.
- •Overall, our combined businesses achieved another solid quarter, reinforcing the strength of our core businesses and positioning us well for sustained growth as the market conditions improve and normalize.
- •A combination of pricing softness and lower demand conditions led to operating margins in the high teens in the fourth quarter.
- •This favorable supply-demand dynamic continued to drive meaningful pricing gains, with term contract renewals increasing in the mid teens year-over-year.
- •Turning to distribution and services, our teams delivered another outstanding quarter, achieving solid year over year growth in both revenue and operating income with strong contributions across nearly all end markets.
- •In power generation, revenues were up 56% year-over-year, driven by robust demand for data centers and prime power customers.
- •Inbound order momentum continued, further expanding our backlog and positioning us well for continued growth into 2026.
- •Power generation has emerged as the leading contributor to growth in both revenue and operating income within the distribution and services segment.
- •In oil and gas, operating income grew 5% year-over-year despite revenue declines driven by continued softness in conventional activity.
- •Overall, the segment continued to perform well, showcasing strength in power generation and our agility in responding to changing demand patterns, with total segment operating income advancing 40% year-over-year.
What went well
- •Kirby reported third quarter earnings per share of $1.65, a 6% increase year-over-year.
- •Coastal marine fundamentals remained strong with barge utilization in the mid to high 90% range, term renewals up mid teens year-over-year, and operating margins around 20%.
- •Distribution and services delivered another outstanding quarter with revenue up 12% and total segment operating income advancing 40% year-over-year, reaching an 11% operating margin.
- •Power generation revenue rose 56% year-over-year and operating income rose 96%, driven by data center and prime power demand, expanding the backlog to a record level.
- •Free cash flow improved to $160 million for the quarter as working capital began to unwind, and the balance sheet strengthened with net debt to EBITDA at 1.3 times and debt to cap improving to 23.8%.
- •Inland utilization recovered to roughly 87.6% by the time of the call after troughing at 80% in the third quarter, signaling improving conditions entering the fourth quarter.
What went wrong
- •Inland marine experienced near-term softness with barge utilization averaging in the mid 80% range, down from the second quarter, due to favorable weather, lighter feedstock, muted petrochemical demand, and fewer barges in maintenance.
- •Inland spot market rates declined low to mid single digits both sequentially and year-over-year, and term contract renewals were flat versus the prior year.
- •Marine transportation operating income decreased 11% sequentially and inland revenues fell 3% year-over-year on lower utilization and moderating spot pricing.
- •Oil and gas revenue declined 38% year-over-year as conventional FRAC equipment demand remained soft amid lower rig counts.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Full-year EPS growth | FY2025 | 15%-25% (toward low end) | Around the low end of the range, no change | Reaffirmed at low end |
| Inland barge utilization | Q4 2025 | Around 90% (Q3 guide) | High 80% range, improving | Improving entering Q4 |
| Inland revenue and margins | Q4 2025 | High teens margin (Q3 actual) | Expected to improve modestly from Q3 levels | Modest improvement expected |
| Coastal revenue and margins | Q4 2025 | Around 20% margin (Q3) | In line with Q3 levels | Held steady |
| Distribution and services revenue growth | FY2025 | Flat to slightly up | Mid single-digit range for full year | Raised |
| Oil and gas revenue | FY2025 | High single to low double digit decline | Decline in low to mid double-digit range | Steeper decline expected |
| Power generation backlog | Q3 2025 | Growing | Record level, up mid teens sequentially and year-over-year, roughly $0.5B-$1B | Record high |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Earnings per share | +6% | Power generation strength and operational execution offsetting inland softness |
| Marine Transportation revenue | -$1.2M (roughly flat) | Inland softness offset by coastal strength; operating margin 18.3% |
| Marine Transportation operating income | -11% | Lower inland utilization and spot pricing |
| Inland revenue | -3% | Lower utilization and moderating spot pricing |
| Coastal revenue | +13% | Pricing gains and fewer planned shipyards |
| Distribution and services revenue | +12% ($41M) | Power generation and commercial and industrial growth |
| Distribution and services operating income | +40% ($12M) | Power generation strength and cost management |
| Power generation revenue | +56% | Demand for backup, prime power, and behind-the-meter applications |
| Power generation operating income | +96% | Strong volume and lean manufacturing benefits |
| Oil and gas revenue | -38% | Soft conventional FRAC demand on lower rig counts |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Inland demand and utilization | Low to mid 90% with emerging chemical softness | Troughed at 80%, recovering to high 80s with improving demand | Bottoming and recovering |
| Inland pricing | Spot up low single digits sequentially | Spot down 4%-5%, term flat, but firming after trough | Bottoming |
| Power generation | Backlog up 15%-20%, 95% non-oil-and-gas | Revenue up 56%, record backlog, behind-the-meter growing | Accelerating |
| Coastal market | Mid 20% renewals, tight supply | Mid teens renewals, around 20% margins, very tight supply | Sustained strength |
| Crude slate / refinery feedstock | Lighter slate displacing barge volumes | Refiners seeking heavier feedstocks, Venezuelan crude potential | Turning favorable |
Q&A summary
Will power generation remain a lumpy business going forward?
There will be some lumpiness driven by OEM engine delivery schedules, but less than before; backlog is at a record up mid teens sequentially and year-over-year, and full-year-over-full-year growth should continue to be strong with a robust order pace.
What got better in the fourth quarter for inland?
A confluence of Q3 negatives (great weather, few lock delays, very light feedstock, weak chemicals, low maintenance) is reversing; first cold front arrived, refiners are seeking heavier feedstocks, chemicals show slight strength, and utilization rose to about 87.6% from an 80% trough.
Is the messaging that conditions are stable, improving, or worsening, and where did spot price go?
Utilization troughed at 80% in Q3 and is at 87.6% now with positive month-over-month and quarter-over-quarter momentum; spot pricing has moved higher since dropping to the 80s in Q3, so the direction is positive though management remains cautious.
How big is the power generation backlog?
Up mid teens both sequentially and year-over-year to a record, roughly between half a billion and a billion dollars and growing, with book-to-bill well over one; management may consider disclosing backlog formally in the future.
What percentage of the inland term contract book renews in Q4?
About 40% of the term portfolio (which is 70% of revenue, mostly one-year terms) renews toward the tail end of the fourth quarter, making Q4 very renewal-heavy, with some renewals occasionally pushing into Q1.
Has inland softness raised M&A opportunities and is coastal sensitive to crude slate?
There is a little more openness from weaker-balance-sheet operators, making acquisitions marginally more likely though hard to predict; coastal is less crude-slate sensitive given its concentrated large-vessel market (under 200 units) and no new capacity coming for two to three years.