Kirby Corporation (NYSE: KEX) reported Q4 EPS of $0.94, $0.03 worse than the analyst estimate of $0.97. Revenue for the quarter came in at $484.1 million versus the consensus estimate of $517.25 million.

GUIDANCE:

Kirby Corporation sees Q1 2016 EPS of $0.75-$0.85, versus the consensus of $0.96.

Kirby Corporation sees FY2016 EPS of $3.00-$3.50, versus the consensus of $4.12.

Our guidance range reflects our limited visibility given today's environment of weakening global growth and volatile commodity prices. In our inland marine transportation market, our first quarter and full year 2016 guidance reflects the full year effect of contracts that repriced in 2015 and a range of potential outcomes which include continued modest pressure on spot and term contract rates and utilization in the high-80% to low-90% range. Additionally, during the first quarter we expect the high water conditions we have experienced in January that led to closures of parts of the Illinois, Ohio and Mississippi Rivers to have a modest negative financial impact."

Mr. Grzebinski continued, "In our coastal marine transportation market, we expect to benefit from having our first new 185,000 barrel ATB in service for the full year, as well as a partial year benefit for the second 185,000 barrel ATB. Given market uncertainty, it is possible that the percentage of revenue from term contract business could continue to decline and result in lower utilization and added non-billable costs. Our guidance range reflects different possibilities for both utilization and pricing, ranging from slightly lower utilization with modest pricing pressure to steady utilization with modest pricing increases."

Mr. Grzebinski further added, "For our diesel engine services segment, in our guidance for 2016, we anticipate the market will remain challenging in the land-based diesel engine market, with little or no improvement. We expect that parts sales during the year will likely be reduced from 2015 levels and offset the benefit from cost cutting efforts, resulting in small quarterly operating losses through the first half of the year. In the marine diesel market, we expect relatively stable demand, consistent with 2015, but also continued market softness in the Gulf of Mexico offshore oil services market."

Kirby expects 2016 capital spending to be in the $220 to $240 million range, which includes approximately $1 million to complete the construction of three inland tank barges and one inland towboat to be delivered in 2016. The capital spending guidance range also includes approximately $95 million in progress payments on new coastal equipment, including one 185,000 barrel coastal ATB, two 155,000 barrel coastal ATBs, two 4900 horsepower coastal tugboats and a new coastal petrochemical tank barge. The balance of $124 to $144 million is primarily for capital upgrades and improvements to existing inland and coastal marine equipment and facilities, as well as diesel engine services facilities.

Mr. Grzebinski concluded, "We finished 2015 with 25.5% debt-to-total capital after a period in which we spent approximately $343 million in capital expenditures, $41 million in acquisitions and $241 million in share repurchases. While we enter 2016 with an uncertain outlook and a number of market challenges, we believe we will have an increase in free cash flow over 2015. The increase in free cash flow, our leading position in the tank barge industry, and our balance sheet strength put us in position to take advantage of opportunities that are often available in difficult market environments."

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