---

US fuel oil transportation firm Kirby Corporation has announced a decrease in net earnings for the third quarter ended September 30 2009 of $6.8 million.

Net earnings for the three-month period were $35.0 million, or $.65 per share, compared with net earnings of $41.8 million, or $.77 per share, for the 2008 third quarter.

Consolidated revenues for the 2009 third quarter were $272.2 million compared with $354.6 million reported for the 2008 third quarter.

Joe Pyne, Kirby's President and Chief Executive Officer, commented, "Despite a challenging economic environment, Kirby was able to perform well during the third quarter. Unfortunately, lower industry barge utilization has kept pressure on barging rates and our revenues and operating results remain below prior year levels. "

Kirby reported net earnings for the 2009 first nine months of $96.7 million, or $1.79 per share, compared with $118.8 million, or $2.19 per share, for the first nine months of 2008. Consolidated revenues for the 2009 first nine months were $822.6 million compared with $1.03 billion for the first nine months of 2008.

Segment Results - Marine Transportation

Marine transportation revenues and operating income for the 2009 third quarter decreased 21% and 11%, respectively, compared with the 2008 third quarter, a reflection of reduced demand across all marine transportation markets.

"The number of time charters, or day rate contracts, continued to decline during the quarter as customers returned equipment they did not need or became comfortable that their requirements could be filled in the spot market," Kirby said.

The marine transportation operating margin improved to 25.3% for the 2009 third quarter compared with 22.7% for the 2008 third quarter. The higher operating margin reflected lower fuel costs, more efficient operations at lower utilization rates, a continued reduction of the number of charter and Kirby owned towboats operated, lower insurance claim losses, and better weather and operating conditions compared with the 2008 corresponding period.

Cash Flow

Kirby continued to generate strong cash flow during the 2009 first nine months. The cash flow was used to fund capital expenditures of $163.0 million, including $121.8 million for new tank barge and towboat construction and $41.2 million for upgrades to the existing fleet, and to reduce debt by $46.9 million. Total debt as of September 30, 2009 was $200.4 million and the debt-to-capitalization ratio was 16.6%, down from 21.7% at December 31, 2008 and 23.2% at September 30, 2008. Cash and cash equivalents at September 30, 2009 was $39.8 million compared with $8.6 million at December 31, 2008.

Tank Barge and Towboat Construction

During the first nine months of 2009, Kirby took delivery of 37 new tank barges and seven new chartered barges with a total capacity of 974,000 barrels. Also, during this period Kirby took delivery of three 1800 horsepower towboats. During the fourth quarter, Kirby anticipates the delivery of nine tank barges and one towboat. Kirby's 2009 capital spending guidance range is $185 to $195 million, including approximately $140 million for new tank barge and towboat construction.

For 2010, Kirby said it plans to take advantage of attractive construction prices for tank barges and build fifty 10,000 barrel and five 30,000 barrel tank barges.

In early 2010, Kirby will take delivery of three tank barges that were delayed from 2009 and three towboats. New construction costs for 2010 are anticipated to total approximately $60 million. Kirby anticipates it will retire approximately 90 barges during 2009 and for 2010, based on current market demand, anticipates that retirements will exceed new construction capacity.

Kirby said that it will continue to review its overall capacity levels and make adjustments as the markets dictate.

Outlook

Commenting on the 2009 fourth quarter market conditions and guidance, Mr. Pyne said, "For the 2009 fourth quarter, our earnings guidance is $.57 to $.62 per share compared with $.72 per share for the 2008 fourth quarter. For the 2009 year, we are lowering our guidance to $2.37 to $2.42 per share compared with net earnings for the 2008 year of $2.91 per share. Our fourth quarter guidance reflects continued pressure on barge transportation rates and an increase in weather delay days associated with the fall and early winter season.

"We do believe we are near the bottom of this market and look for improved market conditions in 2010." Pyne added.

Kirby operates the nation's largest fleet of inland tank barges and towing vessels. The company transports a range black oil products such as No. 6 fuel oil, asphalt, coker fuel and refined products such as gasoline, diesel and jet fuel. In addition, the company transports petrochemicals, such as styrene, benzene and methanol; liquid fertilizer, including anhydrous ammonia and pressurized products, such as butane, propane and butadiene.