Kirby Corporation (NYSE:KEX) Q2 2019 Earnings Conference Call - Final Transcript
Jul 25, 2019 • 08:30 am ET
Good morning and welcome to the Kirby Corporation 2019 Second Quarter Earnings Conference Call. [Operator Instructions]
I would now like to turn the conference over to Mr. Eric Holcomb, Kirby's VP of Investor Relations. Please go ahead.
Eric S. Holcomb
Good morning and thank you for joining us. With me today are David Grzebinski, Kirby's President and Chief Executive Officer; and Bill Harvey, Kirby's Executive Vice President and Chief Financial Officer. A slide presentation for today's conference call as well as the earnings release that was issued earlier today can be found on our website at kirbycorp.com.
During this call, we may refer to certain non-GAAP or adjusted financial measures. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings press release and are also available on our website in the Investor Relations section under financials. As a reminder, statements contained in this conference call with respect to the future are forward-looking statements. These statements reflect management's reasonable judgment with respect to future events. Forward-looking statements involve risks and uncertainties and our actual results could differ materially from those anticipated as a result of various factors. A list of these risk factors can be found in Kirby's Form 10-K for the year ended December 31, 2018.
I will now turn the call over to David.
David W. Grzebinski
Thank you, Eric, and good morning everyone. Earlier today, we announced second quarter revenue of $771 million and earnings of $0.79 per share. This compares to 2018 second quarter revenue of $803 million and adjusted earnings of $0.78 per share. Although revenues were down 4% year-on-year, adjusted earnings per share were flat with a nearly 40% increase in marine transportation operating income, offsetting the impact of reduced distribution and services results.
We'll discuss the second quarter in more detail in a moment, but before we do, I want to first discuss our announcement that we are lowering our 2019 earnings guidance range to $2.80 to $3.20 per share. Although we believe we have strong momentum in marine transportation, reduced expectations for the second half in our oil and gas distribution and services businesses and the extensive delay days in inland marine throughout 2019 will impact our full year.
In distribution and services, although our previous guidance range contemplated some downside in the second half of 2019, the pace of new orders, maintenance activities and part sales have slowed considerably. Discussions for new and remanufactured pressure pumping equipment orders continue, however, it is clear that many of our customers are intensely focused on free cash flow and returns and as such, are operating at very reduced levels of spending. While this is not a good news for 2019, we do believe this level of spending will ultimately create a more ratable market and less volatility in 2020 and beyond.
Additionally, with limited new bills, remanufacturing and maintenance activities ongoing today, we believe this low on activity is creating pent-up demand. While completions activity has slowed in 2019, our customers continue to