Inland waterways carrier Kirby ended a tough year with a 24 percent decline in net profit in the fourth quarter and the company said Thursday that depressed demand and pricing will cut into earnings in the coming year.
The specialist in tank barge operations and diesel engine services, said revenue fell 20.5 percent in the last three months of the year, about the same as for 2009 as a whole, leaving the Houston-based company with just more than $1 billion in revenue last year.
Kirby took $4.8 million in charges in the fourth quarter for staff reductions and goodwill impairment on its Osprey Line segment and company President and CEO Joe Pyne said Kirby will take more charges in the first quarter. “The economy remains weak and somewhat unpredictable,” he said.
He called 2009 “a challenging year” for the company.
“A decline in volumes in all four marine transportation markets resulted in lower tank barge utilization levels industry wide that led to increased downward pressure on term contract and spot market pricing throughout 2009,” he said.
“Our diesel engine services segment's marine and railroad service levels and direct parts sales have also remained well below 2008 levels due to weak marine transportation, offshore oil services and railroad markets, which resulted in deferrals of maintenance on customers' idled equipment."
The larger marine transportation unit’s operating profit of $51.1 was down 17.8 percent, but cost cuts helped keep the operating margin at 23.6 percent compared to 23.4 percent last year.