Kirby Corporation (KEX) Earnings & Analysis

Latest quarter

Kirby reported Q2 FY2026 revenue of $922.4 million, up from $855.5 million a year earlier, while diluted earnings per share remained at $1.67. Its operating margin fell to 13.3% from 15.4%, and free cash flow declined to $7.4 million from $34.0 million.

In the filing, Kirby attributed a 9% increase in second-quarter marine transportation revenue to higher inland term pricing and fuel rebills, partly offset by lower inland spot pricing. Marine operating income fell 11%, primarily because rising fuel costs preceded contractual price adjustments. Distribution and services revenue rose 6% and operating income rose 8%, with marine repair and power generation contributing to growth; conventional oilfield activity declined.

A subsequent report covers the quarter ended September 30, 2026: Kirby’s revenue of $977.2 million exceeded the consensus of $942.7 million, and adjusted EPS of $2.09 exceeded the consensus of $1.96. Those comparisons relate to Q3, not the Q2 results discussed on the call.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

On the Q2 call, CEO David Grzebinski said inland demand benefited from refinery utilization, refined-product and crude movements, and petrochemical activity. He said limited additions to industry capacity supported barge utilization in the low 90% range, while inland spot rates improved sequentially and term renewals increased year over year.

CFO Raj Kumar said coastal utilization was in the high 90% range, but renewals fell in the low-single-digit range because of conditions affecting smaller articulated tug barges. Asked about those renewals, President Christian O’Neil said the pressure was concentrated in particular Northeast trade lanes and that the rest of the fleet had seen rate increases year to date.

Grzebinski said fuel costs had temporarily reduced inland margins before contract adjustments. In response to a question about the earnings impact, he put the Q2 headwind at $0.05 to $0.10 per share, probably toward the higher end, and expected recovery in the third or fourth quarter, mostly in the third. Kumar declined to detail quarterly flows, though he said Q3 was probably better than Q4.

In distribution and services, Grzebinski said demand for behind-the-meter and backup power continued to grow, but engine availability affected delivery timing. He updated the power generation backlog to $1 billion to $1.5 billion and said much of the incoming business was behind-the-meter power. O’Neil announced Kirby Integrated Power Systems to pursue service work for power and data center customers.

Asked about investment and industry capacity, O’Neil estimated that about 60 barges were being built that year, largely replacing retiring equipment. Grzebinski said Kirby preferred acquisitions or asset purchases but would use free cash flow for repurchases when those opportunities were unavailable. Kumar said working capital requirements had risen with business activity, collection timing and marine fuel rebills.

Guidance

In its October release, Kirby narrowed its FY2026 EPS growth guidance to 10% to 15% and expected results toward the upper end; on the Q2 call it had reaffirmed 5% to 15%.

Kirby now expects inland marine revenue growth in the low-double-digit range, compared with its earlier high-teens to 20% outlook. It expects coastal marine revenue growth in the mid-to-high-single-digit range and distribution and services growth in the high-single-digit range; the earlier call outlook was mid-single-digit growth for each.