Kirby Posts Record Q3 EPS as Marine Revenue Rises 17%

Kirby Corporation (NYSE: KEX) reported record quarterly earnings for the third quarter of 2026 as stronger marine transportation demand, high barge utilization and growth in power-generation services lifted revenue and operating profit. The company narrowed its full-year EPS growth guidance to 10% to 15% and said results are expected to trend toward the upper end of that range under current market conditions.

Revenue rose 12% year over year to $977.2 million, while operating income increased 17% to $150.9 million. Net earnings attributable to Kirby climbed 20% to $110.8 million, and diluted earnings per share advanced 27% to $2.09. Compared with the second quarter, revenue increased 6%, operating income rose 23% and EPS grew 25%.

Marine transportation benefits from demand and utilization

Marine transportation revenue increased 17% from a year earlier to $568.7 million, accounting for the majority of Kirby’s quarterly revenue. Operating income for the segment rose 26% to $111.9 million, and operating margin expanded to 19.7% from 18.3%. Revenue and operating income were also up 6% and 27%, respectively, from the second quarter.

Inland operations generated 81% of marine transportation revenue, with average barge utilization in the low-90% range. Market conditions strengthened as the quarter progressed, according to the presentation. Spot rates rose 4% to 6% year over year and 3% to 5% sequentially, while term contract pricing increased 2% to 4% from the prior-year period. Inland operating margin was in the 20% range despite fuel-cost headwinds.

Term contracts represented about 65% of inland revenue, with roughly 56% attributed to time charters. Kirby ended the quarter with 1,148 inland barges and 25.7 million barrels of capacity after adding 16 barges through reactivations, new construction and acquisitions and retiring two barges.

Coastal operations contributed the remaining 19% of marine transportation revenue. Healthy demand and limited availability of large-capacity vessels supported utilization in the high-90% range. A term contract renewed during the quarter at an increase in the low-double-digit range from a year earlier. Coastal operating margin remained in the mid-teens, while term contracts accounted for about 95% of revenue.

For full-year 2026, Kirby expects inland revenue to grow at a low-double-digit rate, with utilization in the low-90% range and operating margin between the high teens and low-20% range. Coastal revenue is expected to increase at a mid-to-high-single-digit rate, with utilization in the high-90% range and a mid-teens operating margin. The company cited strong customer demand, limited inland newbuild activity and balanced coastal supply and demand, while noting ongoing cost pressures in the coastal business.

Power generation and marine repair support services growth

Distribution and services revenue rose 6% year over year to $408.5 million. Operating income increased 13% to $48.4 million, and operating margin improved to 12.0% from 11.0%. Compared with the second quarter, both revenue and operating income increased, with operating income rising 27%.

Power generation, which represented 46% of segment revenue, recorded an 8% increase in revenue and a 13% rise in operating income from a year earlier. Demand remained robust among data-center and industrial customers, while behind-the-meter power solutions supported continued backlog growth. Kirby cautioned that supply constraints related to original equipment manufacturers and the timing of engine deliveries could continue to create quarter-to-quarter variability.

Commercial and industrial operations accounted for 44% of segment revenue. Revenue increased 8% and operating income rose 23% year over year, supported by strong marine repair activity and demand across other industrial markets. On-highway activity remained constrained.

Oil and gas contributed 10% of segment revenue. Revenue and operating income declined 9% and 15%, respectively, from the prior-year quarter. Sequentially, however, revenue was flat and operating income increased 54%, reflecting a greater mix of higher-margin parts and service work as well as cost management.

Kirby expects full-year distribution and services revenue to grow in the high-single-digit range, with an operating margin in the high-single digits. Power generation and commercial and industrial activities are each expected to account for about 45% of segment revenue, with oil and gas contributing approximately 10%. Management expects oil and gas activity to remain stable after market conditions improved modestly from recent lows.

Cash flow, capital returns and acquisition plans

Net cash provided by operating activities totaled $143.5 million during the quarter, while capital expenditures were $69.5 million. Non-GAAP free cash flow, defined as operating cash flow less capital expenditures, was $74.0 million.

Kirby repurchased 816,234 shares at an average price of $137.04, returning $112 million to shareholders. The company also entered into an agreement to acquire certain inland marine assets from undisclosed sellers for approximately $115 million. The assets include nine inland towboats, 14 inland tank barges, nine bow thrusters and a fleeting operation serving the Corpus Christi area.

For 2026, Kirby projects net cash provided by operating activities of $575 million to $675 million and capital expenditures of $220 million to $260 million. As of September 30, the company reported $1.1 billion of total debt, $38 million of cash and cash equivalents, and $530 million of available liquidity.

Kirby said its outlook remains subject to economic conditions, competition, weather and water levels, marine accidents, lock delays, fuel costs, interest rates, environmental regulation, competitor equipment construction and acquisition-related factors. Supply constraints and the timing of OEM engine deliveries also remain sources of variability for the distribution and services business.