HMLP vs. KEX: Which Stock Is the Better Value Option?

HMLP vs. KEX: Which Stock Is the Better Value Option?

Q1 2020 Kirby Corp Earnings Call

Kirby Corporation ("Kirby") (KEX) will announce its 2020 first quarter results at 6:00 a.m. Central Daylight Time (“CDT”) on Tuesday, May 5, 2020. This announcement will be followed by an earnings conference call webcast at 7:30 a.m. CDT. To listen to the webcast, please visit the Investor Relations section of Kirby’s website at www.kirbycorp.com.

HOUSTON, March 20, 2020 -- Kirby Corporation ("Kirby" or the “Company”) (NYSE:KEX) announced today that Kirby management will participate in a webcast hosted by Stephens, Inc..

Kirby (KEX) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Oceangoing ships are performing very differently amid the crisis, depending on which cargo they carry. The same holds true in America's river transport system. Consequences of this year's two black swans — coronavirus and the oil price war — vary widely depending on whether a barge is carrying petrochemicals, crude oil, crops or coal.Tank-bargesThe largest tank-barge owner, Houston-based Kirby Corp. (NYSE: KEX), held a special conference call on Monday to address the current market upheaval. The primary cargoes tank-barges carry are liquids for the petrochemical sector, much more so than crude oil — and the petrochemical business is now driving the market higher.According to Kirby CEO David Grzebinski, "Our utilization levels have been in the 95% range in recent weeks. This morning we were 97% utilized, which frankly is as busy as I've ever seen it."Our customers [petrochemical plants and refineries] want to make sure their supply chains are in good shape. The ramifications of having to shut down a plant due to not having supplies are huge. Barging is just a small cost in [comparison to] that."Make no mistake though: If the U.S. economy goes into recession — and we may be already there — they [plant owners] will probably cut down their volumes," Grzebinski acknowledged.He believes petrochemical shippers will first pare throughput in less efficient plants in Europe before doing so in the U.S. Construction on major new plants, such as Shell's in Pennsylvania, has been halted due to coronavirus concerns. "My view is that once they start construction, they'll complete the plants, but they're going to be postponed," he said. "The ones that are still looking for permits will be delayed until the world economy settles out."He conceded that plunging oil prices will decrease the amount of crude oil transported on the rivers, but asserted that the barge sector was in a better position to handle this than the last time it happened, in 2015."In 2015, we had 550 barges moving crude and 260-270 new barges coming to the market. When we got to the bottom in the market in 2018, there were about 130 barges moving crude," he said, noting that all the excess barges redeployed from crude took years to be absorbed in noncrude markets."We're at a different starting point this time. There are about 300 barges in the crude market and about 130 to be delivered this year, and I wouldn't be surprised if it was only 50-75 [after deliveries are pushed back]," said Grzebinski, noting that if 150 barges ultimately ended up being redeployed out of the crude trade in the current cycle, it would only add about 4% in capacity to the noncrude tank-barge fleet.Going forward, if petrochemical tank-barge demand declines due to a U.S. recession, he said Kirby's margins can be protected in the short term by time-charter coverage, and beyond that, by reducing costs through the reduction of its chartered-in towboat fleet — the same strategy it used to protect margins during the 2008-09 financial crisis.Dry-cargo bargesMarket conditions for dry-cargo barges were more challenging than for tank-barges even before recent events. The coronavirus and the oil price war intensify those pressures.American Commercial Lines (ACL), the country's second-largest owner of dry–cargo barges, filed for Chapter 11 bankruptcy protection on Feb. 7. In a court filing explaining why it needed bankruptcy protection, it cited fallout from the U.S.-China trade war, among other reasons."The imposition of tariffs by China on U.S. soybean imports and continuing trade tensions between the U.S. and China have resulted in a decrease in demand for U.S.-produced soybeans, resulting in a direct decrease in demand for ACL's services," it said.The Phase One trade agreement between the U.S. and China was signed on Jan. 15, offering hope of increased agricultural sales, but the coronavirus may have dashed such hopes, both by lowering China's economic ability to make purchases and by re-escalating geopolitical tensions between the U.S. and China."Developments across the globe since the agreement was signed in mid-January, from the coronavirus outbreak to the falling oil price, have made it even less likely that China and the U.S. will be able to live up to their commitments and thereby help boost demand for the shipping industry," said Peter Sand, chief economist of shipping association BIMCO, who doesn't expect progress until "the dust has settled around coronavirus disruptions."ACL's bankruptcy filing also pointed to declines in domestic coal shipments spurring redeployment of barge capacity from coal to other cargoes, creating barge overcapacity for those other markets, leading to "a decline in freight rates ACL was able to charge." The Port of South Louisiana reported a 48% drop in coal volumes in full-year 2019 versus 2018, with overall barge calls down 14%.The Saudi Arabia-induced collapse in the price of crude oil, now down to $20-$25 per barrel, is yet another negative for coal used for power generation, as lower crude pricing pushes down pricing of natural gas, which competes with coal. The economic fallout from coronavirus will also reduce demand for coal used for steel production. The U.S. Energy Information Administration expects U.S. coal production to decline by another 17% in 2020, to its lowest level in 50 years. More FreightWaves/American Shipper articles by Greg Miller  See more from Benzinga * ACL Barge Bankruptcy Could Be A Plus For River Rates * Kirby's Inland-Barge Consolidation Push Continues(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Falling revenues in oil and gas market is a major setback for Kirby (KEX). However, growth in marine division is impressive.

KEX earnings call for the period ending March 31, 2020.

Kirby (NYSE:KEX) shareholders are no doubt pleased to see that the share price has bounced 34% in the last month...

It's a strange time for public reporting. Companies are posting results for a period – January to March – that's largely irrelevant because it pre-dated peak COVID-19 fallout.The value of this round of quarterly reporting is in commentary on current conditions, particularly from bigger public players who can provide front-line insights on the U.S. economy.One of those bigger players is Kirby Corporation (NYSE: KEX), the largest owner of inland tank barges in America and by far the largest listed vessel owner measured by market capitalization (at $3 billion).Before the market opened on Tuesday, Kirby reported a net loss of $248.5 million for the first quarter of 2020 compared to net income of $44.3 million in the same period last year.However, Kirby reported a $334.6 million after-tax write-down of its non-maritime distribution and services segment, which serves oil and gas customers. Excluding non-cash items, Kirby reported adjusted net income of $35.3 million or $0.59 per share, above the analyst consensus forecast for adjusted earnings of $0.44 per share.Inland barge outlookThe utilization rate for Kirby's inland tank barges averaged around 95% in the first quarter but fell to around 90% in recent weeks. Spot rates (for contracts of less than a year in duration) were up 5-7% year-on-year in the first quarter and long-term contracts (for period charters and contracts of affreightment of a year or longer) were up 2-5%.The company's fleet primarily carries petrochemicals, and to a lesser extent refined products and crude. How that fleet is faring offers a snapshot of the country's consumption patterns amid coronavirus lockdowns and gradual reopenings. Kirby Corp CEO David Grzebinski. Photo credit: Kirby CorpThe general impression Kirby CEO David Grzebinski gave on the conference call with analysts was that today's market conditions, while highly uncertain, are far from disastrous. He dubbed the current situation "crazy and surreal" but pointed out "we had a pretty good first quarter [in the inland segment]."View more earnings on KEX"Many refineries have reduced utilization to the 60% range from 90% earlier this year ... but refinery utilization bumped up about 2% this week – at least it's going in the opposite direction – and we're starting to see traffic in Houston pick up," he said.Asked about the core petrochemical sector, he responded, "As we talk to our chemical customers, anything involving consumer packaging is going very strong, just because everybody's buying individual-wrap things nowadays. Obviously, anything that goes into disinfectants or alcohol-type things are also pretty strong. What has been very, very weak is anything related to the auto sector. As you would expect, basically nobody's ordering."So, it's a mixed bag. It's literally a day-to-day thing, but some chemical volumes have pulled back," he acknowledged. "They [petrochemical plants] want to run as much as we want them to run, because the higher their utilization, the more efficient they are. They just need demand to come back."As with ocean-going tankers, Kirby confirmed an increase in liquid-cargo storage opportunities, which is helping keep utilization high as some of the transportation demand from refineries and petrochemical plants pulls back."We're seeing storage opportunities across products and crude," Grzebinski said, attributing these deals to both "all the dislocations in the supply chain" as well as "contango plays" (in which traders buy low and hope to sell high). He added, "We're seeing storage put a floor on how far utilization moves down."Too soon to callIn general, Grzebinski concluded, "We are starting to see signs of things coming back to life. But it's too soon to call."If things were to hold where we are right now and this was the bottom, we may not see any margin decline [for inland] at all, but that's a big if. We've pulled our guidance because we don't know how long this will last or how deep it will go."I don't know how strong we'll come back from this because I worry about a rolling lockdown," he warned. More FreightWaves/American Shipper articles by Greg Miller   Chart credit: Kirby CorpSee more from Benzinga * How Coronavirus Affects US River-Barge Market(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

TNK vs. KEX: Which Stock Is the Better Value Option?

Shares of Kirby (NYSE:KEX) were unchanged in pre-market trading after the company reported Q1 results.Quarterly Results Earnings per share fell 20.27% year over year to $0.59, which may not compare the estimate of $0.02.Revenue of $643,926,000 lower by 13.52% from the same period last year, which beat the estimate of $634,020,000.Outlook Kirby hasn't issued any earnings guidance for the time being.Revenue guidance hasn't been issued by the company for now.Conference Call Details Date: May 05, 2020View more earnings on KEXTime: 04:00 PM ETWebcast URL: https://edge.media-server.com/mmc/p/7kp47iqgPrice Action Company's 52-week high was at $92.30Company's 52-week low was at $32.76Price action over last quarter: down 31.97%Company Profile In its legacy marine transportation segment (46% of first-half 2018 sales), Kirby operates the largest fleet of tank barges on the U.S. inland waterway system. Since its incorporation in 1969, the firm's marine division has built a market- leading position by successfully rolling up smaller tank-barge fleets. Kirby also runs a large diesel-engine and oilfield-equipment services operation (54% of sales), that primarily serves the oil and gas industry, but also commercial and industrial customers.See more from Benzinga * Recap: LendingTree Q1 Earnings * General Finance: Q3 Earnings Insights * Recap: Carter's Q1 Earnings(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

HOUSTON, April 02, 2020 -- Kirby Corporation ("Kirby") (NYSE: KEX) today announced that it has completed the acquisition of Savage Inland Marine’s (“Savage”) inland barge.

To the annoyance of some shareholders, Kirby (NYSE:KEX) shares are down a considerable 49% in the last month. That...

First quarter 2020 GAAP loss per share of ($4.15), or earnings per share of $0.59 excluding one-time items of ($4.74) per share One-time items include asset impairments in.

Kirby's (KEX) Q1 results reflect a 36.1% drop in distribution and services revenues. Impressive performance of the marine transportation division partly offsets the adversity.

Coronavirus is probably the 1 concern in investors' minds right now. It should be. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW. We predicted that a US recession is imminent and US stocks will go down by at least 20% in the next 3-6 […]

Stewart & Stevenson (“S&S”), a subsidiary of Kirby Corporation (“Kirby”) (KEX), and Rice University announced today the signing of an exclusive licensing agreement to produce an advanced version of the ApolloBVM ventilator. The ApolloBVM ventilator is an emergency device intended to help patients breathe during first response situations or when traditional, more complex ventilators are not available. The programmable device is designed to operate a common bag valve mask for extended periods of time while patients await the availability of a traditional ventilator.

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