Kirby says Ike, Gustav will drag down Q3 profits

24 September 2008 20:37  [Source: ICIS news]

HOUSTON (ICIS news)--Shares of Kirby Corp fell slightly before rebounding on Wednesday following the barge company's announcement that third-quarter earnings would likely be 8-9 cents/share (€.05-.06/share) less due to the impact of Hurricanes Ike and Gustav.

 

Based in Houston, Texas, Kirby said it still expected per-share profits to rise nearly 20% over the same quarter last year.

 

Kirby chief executive Joe Pyne said in a statement that none of the firm's active barges and towboats were damaged by the storms, though many were idled because of production delays and closure of a crucial stretch of the Texas intracoastal waterway.

 

Pyne added that the Houston area petrochemical industry, which he noted contains over 90% of US production capacity, suffered greater hits from Ike and Gustav than it did from Hurricanes Rita and Katrina in 2005.

 

Pyne said that, as of Friday, 19 September, 50% of the area's petrochemical capacity was idled.

 

"This compares with approximately 35% idled one week after Hurricane Rita's 2005 landfall, and less than 10% idled one week after Hurricane Katrina's 2005 landfall," Pyne said.

 

"We do anticipate a return to strong pre-hurricane operating fundamentals after customer facilities begin operating at normal levels," Pyne said.

 

He added that an eight-mile stretch of the Gulf Intracoastal Waterway between the Houston Ship Channel and Port Arthur, Texas should be re-opened on Wednesday, but a Coast Guard official said that had not happened yet.

 

"We're awaiting a decision by the Army Corps of Engineers that should come later today or tomorrow," said Coast Guard Petty Officer William Mitchell.

 

One of the largest chemical barge operators in the US, Kirby expects 2008 third quarter earnings to be 73-76 cents/share compared with 64 cents/share in the 2007 period.

 

Kirby's stock, traded under the NYSE-listed symbol KEX, fell to a low of $40.18 Wednesday before rebounding to $40.65 in midday trading. The stock closed Tuesday at $40.23.

 

($1 = €0.68)

 

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By: Lane Kelley
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