HOUSTON, May 12, 2011 /PRNewswire/ -- Kirby Corporation
("Kirby") (NYSE: KEX) announced
today that the current high water and flooding issues on the
Mississippi River System may have a greater impact on the 2011
second quarter results than originally anticipated. On
April 27, 2011, as part of
Kirby's first quarter earnings
announcement, Kirby announced 2011
second quarter earnings guidance of $.67 to
$.77 per share, including an estimated $.02 to $.07 per share negative impact from the
high water and lock issues on Kirby's marine transportation segment,
dependent on the severity and length of time of the high water on
the waterways. Kirby estimates the impact may be greater than
$.07 per share, but is unable to
further quantify the impact until the situation more fully
evolves.
Since April 27, conditions on the
Mississippi River System have continued to deteriorate. The
Ohio Valley received record rainfall and the heavy rainfall
extended into May, thereby prolonging flooding conditions on the
Ohio and Tennessee Rivers,
extending the Smithland Lock closure near Paducah, Kentucky and creating additional
delays for both inbound and outbound barge traffic on the Ohio
River. As of today, predictions are that the Smithland Lock
on the Ohio River will remain closed for several more days.
The high water on the Ohio River, as well as the upper
Mississippi River, is flowing into the lower Mississippi River and
creating flooding conditions as the high water crest makes its way
south. Water levels at Memphis crested on Tuesday, May 10, at 47.8 feet, slightly below the
historic high levels of 48.7 feet recorded in 1937. It is
anticipated that as the high water crest moves south, water levels
at Vicksburg, Natchez, Baton
Rouge and New Orleans will
reach or exceed historic record levels.
In anticipation of these high water levels on the levees between
Natchez and Baton Rouge, and high water crests at
Baton Rouge and New Orleans, the Army Corps of Engineers has
opened the Bonnet Carre Spillway south of Baton Rouge and indicated the Morganza
Spillway located north of Baton
Rouge may also be opened. Water flowing into the
Atchafalaya River will flood the Atchafalaya River Basin causing
high water and swift currents. The United States Coast Guard
has issued notice that when certain conditions are met, it will
close the Gulf Intracoastal Waterway in the Morgan City area to marine traffic. This
closure may last up to several weeks. The high water on the
Mississippi River System and the potential closure of the Gulf
Intracoastal Waterway will impact tank barge traffic.
Joe Pyne, Kirby's Chairman and Chief Executive Officer,
commented, "The current flooding conditions on the Mississippi
River System and the anticipated closure of the Gulf Intracoastal
Waterway will have a negative impact on our inland marine
transportation operations and second quarter earnings.
However, the majority of movements west of Morgan City on the Gulf Intracoastal Waterway,
including the Lake Charles,
Beaumont, Port Arthur, Houston and Corpus
Christi areas are operating as usual. The upper
Mississippi River and Illinois River have returned to normal
navigation. Based on current conditions, we anticipate the
Ohio River to return to normal navigation in mid to late May, and
the lower Mississippi River to return to normal navigation by the
end of May or early June. We anticipate the last area to
resume normal navigation will be the Gulf Intracoastal Waterway's
Morgan City area as the
Atchafalaya River Basin is just now being impacted and may be the
slowest to recover. Unfortunately, until the flooding subsides and
tank barge traffic resumes, it is not possible for us to accurately
assess the financial impact of these historic events."
Mr. Pyne continued, "We will revise or confirm our second
quarter earnings guidance when our assessment of the financial
impact of the high water events is completed. Approximately
50% of our marine transportation revenue under term contracts is
from time charters, which are insulated from revenue fluctuations
caused by weather and navigational delays. These high water
issues will pass and the Mississippi River System and the Gulf
Intracoastal Waterway will return to normal navigation levels and
activity. Our inland tank barge fundamentals have not changed
and remain strong. As we said in our first quarter earnings
announcement, we anticipate that U.S. petrochemical production for
both domestic use and exports will remain strong based in part on
the continued low United States
natural gas prices. United States refinery utilization is
also anticipated to remain stable, with continued exports of diesel
fuel and heavy fuel oil."
Kirby Corporation, based in Houston,
Texas, operates inland tank barges and towing vessels,
transporting petrochemicals, black oil products, refined petroleum
products and agricultural chemicals throughout the United States inland waterway system.
Through the diesel engine services segment, Kirby provides after-market service for
medium-speed and high-speed diesel engines and reduction gears used
in marine and power generation applications, and distributes and
services high-speed diesel engines, transmissions, including
hydraulic fracturing equipment, for land-based pressure pumping and
oilfield service markets.
Statements contained in this press release with respect to the
future are forward-looking statements. These statements
reflect management's reasonable judgment with respect to future
events. Forward-looking statements involve risks and
uncertainties. Actual results could differ materially from
those anticipated as a result of various factors, including
cyclical or other downturns in demand, significant pricing
competition, unanticipated additions to industry capacity, changes
in the Jones Act or in U.S. maritime policy and practice, fuel
costs, interest rates, weather conditions, and timing, magnitude
and number of acquisitions made by Kirby. Forward-looking statements are
based on currently available information and Kirby assumes no obligation to update such
statements. A list of additional risk factors can be found in
Kirby's annual report on Form 10-K
for the year ended December 31, 2010,
filed with the Securities and Exchange Commission.
SOURCE Kirby Corporation