A slide presentation for today's conference call as well as the earnings release which was issued earlier today can be found on our website. Earlier today we announced third quarter earnings per share of $1.65, a 6% increase year-over-year. In the third quarter, we delivered steady results in total, driven by robust customer demand in power generation and disciplined operational execution across all of our businesses. Overall, our combined businesses achieved another solid quarter, reinforcing the strength of our core businesses and positioning us well for sustained growth as the market conditions improve and normalize.
A combination of pricing softness and lower demand conditions led to operating margins in the high teens in the fourth quarter. This favorable supply-demand dynamic continued to drive meaningful pricing gains, with term contract renewals increasing in the mid teens year-over-year. Turning to distribution and services, our teams delivered another outstanding quarter, achieving solid year over year growth in both revenue and operating income with strong contributions across nearly all end markets. In power generation, revenues were up 56% year-over-year, driven by robust demand for data centers and prime power customers.
Inbound order momentum continued, further expanding our backlog and positioning us well for continued growth into 2026. Power generation has emerged as the leading contributor to growth in both revenue and operating income within the distribution and services segment. In oil and gas, operating income grew 5% year-over-year despite revenue declines driven by continued softness in conventional activity. Overall, the segment continued to perform well, showcasing strength in power generation and our agility in responding to changing demand patterns, with total segment operating income advancing 40% year-over-year.
| Metric | Period | Current guidance |
|---|---|---|
| Full-year EPS growth | FY2025 | Around the low end of the range, no change (Reaffirmed at low end) |
| Inland barge utilization | Q4 2025 | High 80% range, improving (Improving entering Q4) |
| Inland revenue and margins | Q4 2025 | Expected to improve modestly from Q3 levels (Modest improvement expected) |
| Coastal revenue and margins | Q4 2025 | In line with Q3 levels (Held steady) |
| Distribution and services revenue growth | FY2025 | Mid single-digit range for full year (Raised) |
| Oil and gas revenue | FY2025 | Decline in low to mid double-digit range (Steeper decline expected) |
| Power generation backlog | Q3 2025 | Record level, up mid teens sequentially and year-over-year, roughly $0.5B-$1B (Record high) |
| Metric | YoY | Note |
|---|---|---|
| Earnings per share | +6% | Power generation strength and operational execution offsetting inland softness |
| Marine Transportation revenue | -$1.2M (roughly flat) | Inland softness offset by coastal strength; operating margin 18.3% |
| Marine Transportation operating income | -11% | Lower inland utilization and spot pricing |
| Inland revenue | -3% | Lower utilization and moderating spot pricing |
| Coastal revenue | +13% | Pricing gains and fewer planned shipyards |
| Distribution and services revenue | +12% ($41M) | Power generation and commercial and industrial growth |
| Distribution and services operating income | +40% ($12M) | Power generation strength and cost management |
| Power generation revenue | +56% | Demand for backup, prime power, and behind-the-meter applications |
| Power generation operating income | +96% | Strong volume and lean manufacturing benefits |
| Oil and gas revenue | -38% | Soft conventional FRAC demand on lower rig counts |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Inland demand and utilization | Low to mid 90% with emerging chemical softness | Troughed at 80%, recovering to high 80s with improving demand | Bottoming and recovering |
| Inland pricing | Spot up low single digits sequentially | Spot down 4%-5%, term flat, but firming after trough | Bottoming |
| Power generation | Backlog up 15%-20%, 95% non-oil-and-gas | Revenue up 56%, record backlog, behind-the-meter growing | Accelerating |
| Coastal market | Mid 20% renewals, tight supply | Mid teens renewals, around 20% margins, very tight supply | Sustained strength |
| Crude slate / refinery feedstock | Lighter slate displacing barge volumes | Refiners seeking heavier feedstocks, Venezuelan crude potential | Turning favorable |