Kirby Caps Record 2025 with Strong Momentum, Eyes Steady Growth Amid Market Headwinds
HOUSTON – Kirby Corporation (NYSE: KEX), a dominant player in domestic marine transportation and diesel power services, closed the books on a record-breaking 2025, company executives announced on the year-end earnings call. Despite navigating the typical fourth-quarter seasonal slowdown, management expressed confidence in the firm's "strong operational and financial momentum" heading into the new year.
CEO David Grzebinski hailed 2025 as "a transformative year," underpinned by the company's ability to generate over $400 million in free cash flow for the second consecutive year. "Our disciplined approach allowed us to aggressively return capital to shareholders while strengthening our balance sheet," Grzebinski stated, referencing over $100 million in stock buybacks and a $130 million debt reduction in Q4 alone.
The quarter presented a mixed picture across Kirby's core segments. The Marine Transportation division, which operates a vast fleet of tank barges, saw revenue of $482 million. CFO Raj Kumar noted that while inland market conditions improved as the quarter progressed from an initial soft patch, severe winter weather on the Gulf Coast caused a significant 82% jump in delay days, squeezing efficiency. Coastal operations, however, remained a bastion of strength with utilization in the mid-to-high 90% range, driving a 22% year-over-year revenue increase.
The standout performer was the Power Generation business within the Distribution and Services (D&S) segment. Revenue here skyrocketed 47% compared to the prior year, fueled by data center and backup power demand. "Power generation is no longer a side story; it's a central driver of our growth narrative," Grzebinski emphasized, noting it now constitutes over half of the D&S segment's revenue.
Looking ahead, management projected "steady financial performance" for 2026, with earnings expected to climb year-over-year. Guidance anticipates inland barge utilization averaging in the low 90s, with pricing firming up alongside demand. The coastal segment is forecast to see mid-single-digit revenue growth, though margins may face early pressure from a heavier schedule of planned shipyard maintenance. In D&S, the explosive growth in power generation is expected to largely offset continued softness in the legacy oil and gas equipment market.
Analysts point to Kirby's strategic positioning as key. "They're successfully pivoting within D&S from the volatile frac market to the structural growth story of data center power," said Michael Thorne, a logistics analyst at Breckenridge Capital. "The inland recovery trajectory and their fortress balance sheet provide a solid floor."
Other observers were more cautious. Sarah Chen, portfolio manager at Coastal Value Partners, noted, "The guidance feels conservative, which is prudent. The real test will be their ability to translate improved utilization into sustained pricing power inland, and to navigate the cost inflation they flagged in wages and medical expenses."
A more critical take came from Leo Grant, editor of The Contrarian Mariner newsletter. "Another quarter of 'aggressive cost management' propping up margins? It's a tired tune," he argued. "They're celebrating a 'record year' built on a one-time working capital release. The core inland business is still fighting for pricing, and the shipyard headwinds they've telegraphed could bite harder than they're letting on. The market is giving them a pass because of the AI/data center hype in power gen."
Kirby ended 2025 with a debt-to-capital ratio of 21.4% and total liquidity of approximately $542 million. For 2026, the company forecasts operating cash flow between $575 million and $675 million, with capital expenditures planned in the $220 to $260 million range.