Kirby Corporation (NYSE:KEX) Q3 2019 Earnings Conference Call - Final Transcript
Oct 25, 2019 • 08:30 am ET
Good morning, and welcome to the Kirby Corporation 2019 Third 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 conference 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 judgement 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 third quarter revenue of $667 million and earnings of $0.80 per share. This compares to the 2018 third quarter revenue of $705 million and earnings of $0.70 per share. Although revenues were down 5% year-on-year, earnings per share increased 14%, driven largely by significant revenue and earnings growth in marine transportation. The addition of Cenac and the continued improvement in marine more than offset reduced oilfield activity in Distribution and Services.
In inland marine, operating conditions improved significantly during the quarter with floodwaters on the Mississippi River receding at the beginning of August and favorable summer weather contributing to a 31% sequential reduction in the delay days. These conditions drove significant improvement in operating efficiencies for much of the quarter, particularly on our contracts of affreightment. Additionally -- with floodwaters subsiding, we were able to reduce operating expenses that have been elevated for much of the year as a result of high water conditions. In the inland market, overall customer demand was stable, but with better weather in the quarter, we saw a modest increases in industry barge availability. This led to a temporary pause in the upward momentum of spot pricing during the quarter.
Pricing on expiring term contracts, however, renewed higher in the low to mid-single digits. Overall, with improved weather, increased pricing and lower cost, inland margins touched 20% in the third quarter. In coastal, we reported a significant improvement in profitability with operating margins approaching 10%. During the third quarter, market conditions were favorable with improving customer demand and continued tight supply for large capacity vessels. Overall, our barge utilization was in the mid-80%