Kirby (NYSE:KEX) reported first-quarter 2026 earnings per share of $1.50, up 13% from $1.33 in the prior-year period, as improving marine transportation fundamentals and continued demand in parts of its Distribution and Services segment helped offset weather disruptions and supply constraints, executives said on the company’s earnings call.
Chief Executive Officer David Grzebinski said results improved as the quarter progressed, with utilization and pricing strengthening in marine transportation and “continued strength underlying demand for power generation and Distribution and Services.” He noted that first-quarter performance was “partially impacted by weather-related disruptions and navigational delays” in Inland Marine operations and ongoing OEM-related engine availability constraints in Distribution and Services.
Marine transportation: utilization high, pricing strengthening
Sequentially, total marine revenues increased 3% from the fourth quarter of 2025, while operating income decreased 11%. Kumar attributed the sequential decline in profitability to typical winter season impacts, including “a 20%-25% sequential increase in delay days” that hurt efficiency.
In the inland business, which contributed about 79% of marine revenue, average barge utilization was in the low 90% range. Grzebinski said utilization strengthened through the quarter and spot pricing improved in the “low single digits” sequentially, while term contract renewals were “flat to slightly up” year over year. He added that limited barge availability and improving demand from refining and petrochemical customers supported the backdrop as the company entered the second quarter.
Analysts pressed management on what was driving the tightening conditions. Grzebinski said the quarter began with a continuation of fourth-quarter trends and that Venezuelan crude flows were a positive contributor early in the period. He also cited widening crack spreads, higher refinery volumes, and “more chemical activity,” noting that disruptions in Middle East supply chains led to higher volumes moving in the U.S. “It’s actually more volumes moving,” he said, adding that momentum has continued to build into the second quarter.
President and COO Christian O’Neil emphasized constrained industry supply, telling analysts that only 66 barges were built last year and Kirby estimates “maybe 70 on the books for this year,” which he characterized as replacement capacity rather than fleet growth. O’Neil also highlighted the cost of new equipment, citing roughly $4.5 million to build a typical 30,000-barrel clean tank barge, and said capital discipline across the market remains strong.
On the coastal side, Kumar said revenues increased 23% year over year, supported by strong customer demand and limited availability of large-capacity equipment. Coastal utilization averaged in the mid-to-high 90% range, and term contract renewals were approximately 20% higher year over year. Coastal accounted for 21% of marine segment revenues and delivered operating margins in the high-teens, management said.
Distribution and Services: power generation demand strong, OEM constraints persist
Kirby’s Distribution and Services segment posted first-quarter revenue of $347 million and operating income of $23 million, for a 6.7% operating margin, Kumar said. Revenue rose 12% from the prior year, while operating income increased about 3%.
Management described mixed end-market conditions. Grzebinski said power generation remained a key driver, while conventional oil and gas activity stayed soft. Kumar said the year-over-year growth was “primarily driven by power generation and strong marine repair activity,” while sequential results were pressured by lower power generation shipments due to OEM engine availability, weakness in on-highway repair, and continued softness in conventional freight markets.
In power generation, revenue increased 45% year over year, and Kirby continued to see “meaningful order activity” for behind-the-meter prime and backup power solutions for data centers and industrial applications, Kumar said. However, he cautioned that OEM engine availability is limiting how quickly demand converts to revenue. Power generation represented 44% of segment revenues, with operating margins in the mid single-digits.
Grzebinski told analysts Kirby has “good visibility through 2027,” adding that certain OEMs are “sold out through 2027” and many are “sold out out into 2029.” He said Kirby feels good about its allocation as a “premier system integrator,” while emphasizing that deliveries remain tight. He also highlighted that behind-the-meter demand is increasingly viewed as prime power rather than a temporary bridge, citing customer contract terms that can extend for years.
Kumar added that behind-the-meter prime systems carry better margins than backup applications, describing prime-side margins as “probably…low double-digit margins.” He also pointed to future service opportunities tied to 24/7 runtime, suggesting service revenue could carry margins above that level in later years.
In commercial and industrial, Kumar said marine repair activity was strong, with revenues up 1% year over year and 8% sequentially. That subsegment represented 46% of segment revenues and produced high single-digit operating margins. In oil and gas, revenue fell 25% year over year but rose 13% sequentially; operating income declined 53% year over year and 28% sequentially. Oil and gas represented 10% of segment revenues and delivered mid single-digit margins, reflecting continued softness in conventional frac-related demand.
Cash flow, capital allocation, and fleet actions
Kirby ended the quarter with $58 million in cash and $983 million of total debt, with a debt-to-capitalization ratio of 22.3%, Kumar said. Available liquidity totaled $635 million at quarter end.
During the quarter, Kirby amended and restated its credit agreement, extending the facility maturity to March 26, 2031, increasing revolving credit commitments to $750 million, and eliminating the term loan credit facility.
Kirby generated $97.7 million of net cash from operating activities and spent $48.3 million in capital expenditures, resulting in free cash flow of $49.4 million, Kumar said. The company returned $52.7 million to shareholders via share repurchases at an average price of $123.18.
Kirby also agreed to acquire 23 barges and three high-horsepower boats for its Inland Marine business for $95.8 million, with $81.4 million paid during the first quarter. O’Neil said the acquired assets were integrated quickly, and Grzebinski reiterated interest in additional acquisitions while emphasizing continued capital discipline.
Outlook: EPS guidance raised, near-term headwinds flagged
Grzebinski said Kirby raised its full-year 2026 EPS guidance to a range of up 5% to up 15%, from a prior range of flat to up 12%, citing constructive marine fundamentals, steady execution, and cost discipline.
He said macro and geopolitical developments—including the Iran conflict, the Venezuelan oil situation, and broader uncertainty—could create near-term variability, but added that conditions have been “somewhat supportive” for Kirby’s operations.
For Inland Marine, the company expects utilization in the low 90% range through the year, with low-to-mid single-digit revenue growth year over year and full-year margins averaging in the high-teens to low 20% range. Grzebinski cautioned about near-term fuel cost headwinds in the second quarter, especially diesel, noting contractual escalators typically lag by 30 to 120 days. He estimated that timing could have an earnings impact of about $0.05 to $0.10 per share in the second quarter before recovery in subsequent quarters.
For coastal marine, Kirby expects mid single-digit revenue growth and operating margins in the high-teens, while anticipating elevated shipyard activity in the second quarter. Kumar said the financial impact depends on shipyard duration and noted Kirby’s focus on managing that timeline.
In Distribution and Services, Kirby expects full-year segment revenues to be flat to slightly up, with operating margins in the mid to high single digits. Grzebinski said second-quarter EPS could be impacted by delayed OEM engine deliveries in power generation, estimating a $0.10 to $0.15 per share effect as some projects shift into the second half of the year.
On the inland pricing cadence, Grzebinski said term contracts represent about 65% of inland revenue and that renewals are “very fourth quarter heavy,” with roughly 40% of the term portfolio repricing in the fourth quarter. He said spot pricing was running about 10% above term pricing, calling it a sign of a healthy market in which spot typically leads term. O’Neil said spot-rate momentum has been strong since March and could move toward a 15% premium.
Management also addressed the Jones Act waiver extension, saying near-term impacts were “almost nonexistent” for inland, while noting that if waivers extended beyond about a year, they could begin to affect “blue water” dynamics. O’Neil added that uncertainty around waivers can have “a chilling effect” on mariner recruitment and retention.
Looking beyond 2026, Grzebinski said Kirby sees “supportive fundamentals driving continued earnings growth beyond 2026 and well into 2027 and 2028,” while reiterating the company’s intent to balance share repurchases with investments and acquisitions.
About Kirby (NYSE:KEX)
Kirby Corporation is a leading domestic maritime transporter of bulk liquid products in the United States. Through its Marine Transportation segment, the company operates one of North America’s largest fleets of inland tank barges and towing vessels. Kirby’s fleet moves petrochemicals, black oil, refined petroleum products and agricultural chemicals along coastal and inland waterways, providing critical logistical support to energy, chemical and agricultural producers.
In addition to its marine operations, Kirby’s Distribution and Services segment offers diesel engine and power generation services, along with aftermarket parts sales.
