Shares of Kirby Corporation (KEX) surged 5.13% in Thursday's trading session following the release of the company's strong third-quarter earnings report and optimistic outlook for the remainder of 2025. The marine transportation and diesel engine services provider delivered solid financial results and highlighted several positive trends across its business segments.
During the earnings call, Kirby's management emphasized that 2025 is on track to be a record earnings year for the company. The power generation segment emerged as a particular bright spot, with CEO David W. Grzebinski reporting a record backlog that has grown by mid-teens both sequentially and year-over-year. This robust backlog, estimated to be between $500 million and $1 billion, is driven by strong demand from data center and industrial customers.
In the marine transportation segment, Kirby reported improving conditions in its inland barge business. Utilization rates have rebounded from a Q3 low of 80% to 87.6% at the time of the earnings call, with some specialty fleets reaching full utilization. The company also noted that spot pricing for inland barges has firmed up entering the fourth quarter, following a 4-5% decline during Q3. Management expressed confidence in the long-term prospects of the inland barge market, citing limited newbuild activity and steady customer demand.
Kirby's strong financial position was also highlighted, with the company projecting cash flow from operations of $620 million to $720 million for 2025. This robust cash flow has enabled significant share repurchases, with $120 million in buybacks executed at an average price of $91 per share in Q3, and an additional $40 million completed after the quarter's end. Management reaffirmed its commitment to allocating the majority of free cash flow to share repurchases in the absence of acquisitions.
The positive earnings report and management's optimistic outlook have clearly resonated with investors, driving the significant stock price increase. As Kirby continues to navigate challenges in certain markets while capitalizing on growth opportunities in others, the company appears well-positioned for continued success in the coming quarters.