Kirby’s second quarter was marked by a steep negative market reaction, with shares dropping sharply after results were announced. Management pointed to a combination of resilient demand in the marine transportation segments and strength in power generation as drivers of quarterly performance. However, CEO David Grzebinski acknowledged operational headwinds, citing “navigational and lock delays” in the Inland Marine business and ongoing supply chain constraints in the Distribution and Services division. The company also highlighted that chemical market softness and macroeconomic uncertainty have started to affect customer activity, particularly in July, with Grzebinski stating, “Our chemical customers have been fighting a negative tape for at least the last year or so, but their volumes have held up.”
Is now the time to buy KEX? Find out in our full research report (it’s free).
Kirby (KEX) Q2 CY2025 Highlights:
- Revenue: $855.5 million vs analyst estimates of $847.4 million (3.8% year-on-year growth, 0.9% beat)
- Adjusted EPS: $1.67 vs analyst estimates of $1.65 (1.2% beat)
- Adjusted EBITDA: $199 million vs analyst estimates of $197.5 million (23.3% margin, 0.7% beat)
- Operating Margin: 15.4%, in line with the same quarter last year
- Market Capitalization: $5.53 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Kirby’s Q2 Earnings Call
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Reed Seay (Stephens Inc.) asked about the extent of demand softness in inland marine and spot pricing trends for July. CEO David Grzebinski explained that chemical market weakness has started to impact barge volumes but described the pullback as modest, with guidance assuming 90% utilization for Q3.
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Seay (Stephens Inc.) also inquired about the drivers behind strong power generation results. Grzebinski said deliveries, not just down payments, fueled the quarter, and emphasized a growing backlog with continued robust orders from data centers.
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Kenneth Scott Hoexter (Bank of America) pressed for clarity on why management shifted toward the lower end of guidance. Grzebinski said muted chemical demand was the key factor, but noted that only a slight demand improvement could boost earnings back toward the higher end.
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Gregory Robert Lewis (BTIG, LLC) probed the rationale for deferring capital expenditures. CFO Raj Kumar explained that timing shifts in growth projects led to CapEx deferrals, which will increase free cash flow and enable more share buybacks if no acquisitions materialize.
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Scott H. Group (Wolfe Research) asked about the sustainability of inland contract pricing and future margin potential. Grzebinski described Kirby’s pricing approach as “slow and steady” due to large sophisticated customers, and reiterated confidence that inland margins could eventually reach the high-20% range with gradual improvement.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) whether inland marine spot pricing and barge utilization stabilize or deteriorate further in response to ongoing chemical market weakness, (2) the pace at which Kirby can convert its power generation backlog into revenue, especially as data center demand continues, and (3) the company’s ability to manage working capital and execute on capital allocation priorities, including share repurchases and potential acquisitions. Any significant changes in trade policy or supply chain conditions will also be key drivers of Kirby’s performance.
Kirby currently trades at $99.14, down from $120.08 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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