Kirby (KEX) Up 10.1% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Kirby (KEX). Shares have added about 10.1% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Kirby due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Earnings Beat at Kirby in Q3Kirby reported third-quarter 2024 earnings of $1.55 per share, which beat the Zacks Consensus Estimate of $1.47 and improved 47.6% year over year. Total revenues of $831.1 million surpassed the Zacks Consensus Estimate of $828.8 million and improved 8.6% year over year.Total costs and expenses (on a reported basis) grew 4.9% year over year to $704.2 million.Segmental PerformanceThe company operates via two segments, namely, marine transportation, and distribution and services.Revenues in the marine transportation unit improved 13.1% year over year to $486.1 million. Operating income was $99.5 million compared with $63.5 million in the year-ago quarter. Operating margin rose to 20.5% from 14.8% in the year-ago quarter.In the inland market, average barge utilization was in the 90% range. Inland revenues increased 11% year over year due to pricing. The inland market accounted for 81% of segment revenues. Operating margin was in the low 20% range for the quarter.In coastal, market conditions were strong during the quarter, with Kirby’s barge utilization in the mid to high-90% range. Coastal revenues increased 23% year over year, driven by better pricing and fewer shipyards. Coastal revenues accounted for 19% of marine transportation segment revenues with an operating margin in the mid-teens range.Distribution and services revenues for the third quarter were $345.1 million, up 3% year over year. Operating income was $30.4 million compared with $33.2 million in the year-ago quarter. Operating margin fell to 8.8% from 9.9% in the third quarter of 2023.Power generation revenues in industrial end markets were up 61% year over year while power generation revenues for oil & gas end markets were down. Power generation revenues accounted for almost 32% of segment revenues. Operating margins were in the high single digits.In the commercial and industrial markets, revenues and operating income increased 4% and 15%, year over year, respectively. Higher business levels in marine engine repair were offset by lower activity in on-highway service and repair. Commercial and industrial revenues accounted for almost 47% of segment revenues. Operating margins were in the high single digits.In the oil and gas market, revenues grew 19% year over year while operating income declined 14% due to lower levels of conventional oilfield activity which resulted in decreased demand for new transmissions and parts partially offset by deliveries of e-frac equipment. Oil and gas revenues accounted for almost 21% of segment revenues. Operating margins were in the mid to high-single digits.Balance Sheet Highlights & Cash FlowAs of Sept. 30, 2024, Kirby had cash and cash equivalents of $67.07 million compared with $53.54 million at the end of the prior quarter. Long-term debt, including the current portion was $978.59 million at the third-quarter end compared with $1.04 billion at the end of the prior quarter.Kirby repurchased 483,335 shares at an average price of $115.46 for $55.8 million in the third quarter.In third-quarter 2024, Kirby generated $206.5 million of cash from operating activities. Capital expenditures were $76.4 million. Free cash flow was $130.1 million.OutlookUnder the Marine Transportation segment, for inland marine, KEX expects continued positive market dynamics with limited new barge construction in the industry for the fourth quarter of 2024. Overall, inland revenues are expected to be flat to slightly down sequentially, considering the onset of normal seasonal weather patterns and some expected equipment maintenance. KEX anticipates operating margins to be slightly down compared with the third quarter.Coastal operating margins are anticipated to be in the mid-to-high single digits in the fourth quarter with coastal revenues expected to be down in the mid-single digits sequentially.For 2024, distribution and services segment revenues are anticipated to be down in the mid-single digits sequentially with operating margins in the mid to high-single digits but lower than the third quarter of 2024.Net cash flow provided by operating activities is anticipated in the $600-$700 million band. Capital expenditures are expected to be between $325 million and $355 million (prior view: $300 and $330 million).How Have Estimates Been Moving Since Then?It turns out, estimates review have trended downward during the past month.The consensus estimate has shifted -9.52% due to these changes.VGM ScoresCurrently, Kirby has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Kirby has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. 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