UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

                                   Form 10-Q

        [ X ]           Quarterly  report pursuant to Section 13 or  15(d)  of
                        the Securities and Exchange Act of 1934
                        
                        For the quarter ended June 30, 1999
                        
        [   ]           Transition report pursuant to Section 13 or  15(d)  of
                        the Securities and Exchange Act of 1934
                        
Commission File Number  1-7615
                                       
                               Kirby Corporation
-------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)
                                       
                   Nevada                                 74-1884980
       -------------------------------         --------------------------------
       (State or other jurisdiction of                  (IRS Employer
       incorporation or organization)                Identification No.)
                                                               
1775 St. James Place, Suite 200, Houston, TX              77056-3453
--------------------------------------------              ----------
  (Address of principal executive offices)                (Zip Code)
                                       
                                (713) 435-1000
-------------------------------------------------------------------------------
             (Registrant's telephone number, including area code)
                                       
                                   No Change
-------------------------------------------------------------------------------
             (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate  by  check  mark whether the registrant: (1)  has  filed  all  reports
required to be filed by Section 13 or 15(d) of the Securities Exchange  Act  of
1934  during  the  preceding 12 months (or for such  shorter  period  that  the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                        Yes  [ X ]          No   [   ]

The  number  of shares outstanding of the registrant's Common Stock,  $.10  par
value per share, on August 11, 1999 was 20,119,489.

<PAGE>    2

                        PART I - FINANCIAL INFORMATION
                                       
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                           CONDENSED BALANCE SHEETS
                                  (Unaudited)
                                       
                                    ASSETS
                                       

<TABLE>
<CAPTION>
                                                     June 30,    December 31,
                                                       1999         1998
                                                     --------    ------------
                                                         ($ in thousands)
<S>                                                  <C>           <C>
Current assets:                                                    
  Cash and cash equivalents                          $    882      $    861
  Available-for-sale securities                        17,378        20,795
  Accounts receivable:                                             
    Trade - less allowance for doubtful accounts       48,827        53,586
    Insurance claims and other                         18,243        16,919
  Inventory - finished goods                           13,323        14,181
  Prepaid expenses                                      6,672         4,829
  Deferred income taxes                                   809         1,187
                                                      -------       -------
                                                                    
       Total current assets                           106,134       112,358
                                                      -------       -------
                                                                    
Property and equipment, at cost                       474,488       466,443
  Less accumulated depreciation                       221,739       209,544
                                                      -------       -------
                                                                    
                                                      252,749       256,899
                                                      -------       -------
                                                                    
Investments in marine affiliates                       13,094        12,795
Goodwill - less accumulated amortization                5,111         5,368
Sundry                                                  2,382         2,879
                                                      -------       -------
                                                              
                                                     $379,470      $390,299
                                                      =======       =======
</TABLE>

           See accompanying notes to condensed financial statements.

<PAGE>    3
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                           CONDENSED BALANCE SHEETS
                                  (Unaudited)
                                       
                     LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                        June 30,   December 31,
                                                          1999         1998
                                                        ---------  ------------
                                                            ($ in thousands)
<S>                                                     <C>          <C>
Current liabilities:                                                          
 Current portion of long-term debt                      $  5,333     $  5,333
 Income taxes payable                                         80          504
 Accounts payable                                         20,182       12,918
 Accrued liabilities                                      41,113       43,305
 Deferred revenues                                         3,665        3,880
                                                         -------      -------
                                                                            
      Total current liabilities                           70,373       65,940
                                                         -------      -------
                                                                           
Long-term debt - less current portion                    122,969      137,552
Deferred income taxes                                     40,605       40,045
Other long-term liabilities                                6,165        5,722
                                                         -------      -------
                                                                            
                                                         169,739      183,319
                                                         -------      -------
                                                                            
Contingencies and commitments                                  -            -
                                                                            
Stockholders' equity:                                                       
 Preferred stock, $1.00 par value per share.                               
   Authorized 20,000,000 shares.                               -            -
 Common stock, $.10 par value per share. Authorized                         
   60,000,000 shares, issued 30,907,000 shares.            3,091        3,091
 Additional paid-in capital                              158,892      159,122
 Accumulated other comprehensive income                     (241)         338
 Retained earnings                                       157,657      147,054
                                                         -------      -------
                                                         319,399      309,605
 Less cost of 10,797,000 shares in treasury                                 
   (10,137,000 at December 31, 1998)                     180,041      168,565
                                                         -------      -------
                                                                             
                                                         139,358      141,040
                                                         -------      -------
                                                                              
                                                        $379,470     $390,299
                                                         =======      =======
</TABLE>

           See accompanying notes to condensed financial statements.

<PAGE>    4
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                       CONDENSED STATEMENTS OF EARNINGS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                            Three months ended     Six months ended
                                                 June 30,              June 30,
                                            -------------------   -------------------
                                              1999       1998      1999       1998
                                            -------     -------   --------   --------
                                            ($ in thousands, except per share amounts)
<S>                                         <C>        <C>        <C>        <C>
Revenues:                                                             
 Marine transportation                      $63,672    $62,858    $121,401   $122,255
 Diesel engine services                      20,383     21,466      41,135     44,324
 Investment income and other                    191        352         346        809
 Gain on disposition of assets                    3        208          35        244
                                             ------     ------     -------    -------
                                                                      
                                             84,249     84,884     162,917    167,632
                                             ------     ------     -------    -------
Costs and expenses:                                                   
 Costs of sales and operating expenses       54,157     53,963     107,095    108,675
 Selling, general and administrative          8,661      9,730      17,900     19,306
 Taxes, other than on income                  1,964      1,978       3,689      3,959
 Depreciation and amortization                6,829      6,829      13,509     13,659
                                             ------     ------     -------    -------
                                                                      
                                             71,611     72,500     142,193    145,599
                                             ------     ------     -------    -------
                                                                      
  Operating income                           12,638     12,384      20,724     22,033
Equity in earnings of insurance affiliate         -        413           -        907
Equity in earnings of marine affiliates         609      1,149       1,490      1,865
Interest expense                             (2,569)    (3,232)     (5,114)    (5,999)
                                             ------     ------     -------    -------
                                                                      
  Earnings before taxes on income            10,678     10,714      17,100     18,806
Provision for taxes on income                (4,076)    (4,039)     (6,497)    (7,091)
                                             ------     ------     -------    -------
                                                                      
  Net earnings                              $ 6,602    $ 6,675    $ 10,603   $ 11,715
                                             ======     ======     =======    =======
                                                                      
Net earnings per share of common stock:                                                              
 Basic                                      $   .33    $   .31    $    .52   $    .52
                                             ======     ======     =======    =======
 Diluted                                    $   .33    $   .31    $    .52   $    .51
                                             ======     ======     =======    =======
</TABLE>

           See accompanying notes to condensed financial statements.

<PAGE>    5
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                      CONDENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                             Six months ended June 30,
                                                            --------------------------
                                                              1999             1998  
                                                            --------         ---------
                                                                ($ in thousands)      
<S>                                                         <C>              <C>       
Cash flows from operating activities:                                                 
  Net earnings                                              $ 10,603         $ 11,715 
  Adjustments to reconcile net earnings to net cash                                   
   provided by operations:                                                            
     Depreciation and amortization                            13,509           13,659
     Provision for deferred income taxes                       1,249            3,988
     Gain on disposition of assets                               (35)            (244)
     Deferred scheduled maintenance costs                     (1,047)             (72)
     Equity in earnings of insurance affiliate                     -             (907)
     Equity in earnings of marine affiliates, net of                                  
      distributions and contributions                           (299)             855
     Other                                                       (89)              47
  Increase in cash flows resulting from changes in                                   
   operating working capital                                   8,628            1,632
                                                             -------          -------
         Net cash provided by operating activities of                                
          continuing operations                               32,519           30,673
     Net cash provided by operating activities of                                    
      discontinued operations                                      -              108
                                                             -------          -------
         Net cash provided by operating activities            32,519           30,781
                                                             -------          -------
TABLE CONTINUED ON NEXT PAGE                                                         
</TABLE>
                                                                

<PAGE>    6                                                                  
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES               
                                                                              
                 CONDENSED STATEMENTS OF CASH FLOWS, Continued              
                                  (Unaudited)                                

<TABLE>                                                                              
<CAPTION>                                                                            
                                                             Six months ended June 30,
                                                            --------------------------
                                                              1999             1998   
                                                            --------         ---------
                                                             ($ in thousands)         
<S>                                                         <C>              <C>         
Cash flows from investing activities:                                                
  Proceeds from sale and maturities of investments             2,528            1,034 
  Purchase of investments                                          -           (1,876)
  Capital expenditures                                        (9,382)         (16,542)
  Proceeds from disposition of assets                            645            1,259
  Proceeds from disposition of business                            -           38,600
  Investing activities of discontinued operations                  -             (275)
                                                             -------          -------
         Net cash provided by (used in) investing                                    
          activities                                          (6,209)          22,200
                                                             -------          -------
                                                                                     
Cash flows from financing activities:                                                
  Borrowings (payments) on bank revolving credit                                     
   agreements, net                                            (9,500)          25,400
  Payments on long-term debt                                  (5,083)          (5,167)
  Purchase of treasury stock                                 (11,838)         (75,706)
  Proceeds from exercise of stock options                        132            1,528
                                                             -------          -------
         Net cash used in financing activities               (26,289)         (53,945)
                                                             -------          -------
         Increase (decrease) in cash and cash equivalents         21             (964)
                                                                                     
Cash and cash equivalents, beginning of year                     861            2,043
                                                             -------          -------
Cash and cash equivalents, end of period                    $    882         $  1,079
                                                             =======          =======
Supplemental disclosures of cash flow information:                                   
  Cash paid during the period:                                                       
     Interest                                               $  4,886         $  5,919
     Income taxes                                           $  6,043         $  3,374
</TABLE>
                                                                     
           See accompanying notes to condensed financial statements.        

<PAGE>    7                             
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       

                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                       
                                       
      In  the  opinion  of  management,  the accompanying  unaudited  condensed
financial  statements of Kirby Corporation and consolidated  subsidiaries  (the
"Company")  contain  all  adjustments  (consisting  of  only  normal  recurring
accruals)  necessary to present fairly the financial position as  of  June  30,
1999  and December 31, 1998, and the results of operations for the three months
and six months ended June 30, 1999 and 1998.

(1)  BASIS FOR PREPARATION OF THE CONDENSED FINANCIAL STATEMENTS

      The condensed financial statements included herein have been prepared  by
the  Company,  without  audit, pursuant to the rules  and  regulations  of  the
Securities  and  Exchange Commission. Although the Company  believes  that  the
disclosures  are  adequate  to make the information presented  not  misleading,
certain  information and footnote disclosures, including significant accounting
policies  normally included in annual financial statements, have been condensed
or  omitted pursuant to such rules and regulations.  It is suggested that these
condensed financial statements be read in conjunction with the Company's latest
Annual Report on Form 10-K.

(2)  PENDING ACQUISITION

      On  July 29, 1999, the Company announced the signing of an Agreement  and
Plan  of  Merger  with Hollywood Marine, Inc. ("Hollywood") providing  for  the
merger  of  Hollywood,  a privately held, inland tank barge  company  based  in
Houston,  Texas, into Kirby Inland Marine, Inc., a wholly-owned  subsidiary  of
the   Company.    The  Company  will  purchase  Hollywood  for   an   aggregate
consideration   of  approximately  $325,000,000,  consisting  of  approximately
$90,000,000 in Kirby common stock, approximately $135,000,000 in cash  and  the
assumption  or  refinancing  of  all or part of Hollywood's  existing  debt  of
approximately $100,000,000.  The number of shares of Kirby common stock  to  be
issued  in the merger will be determined based on the average trading price  of
the  common  stock  on the New York Stock Exchange during a twenty  day  period
shortly before the closing, with the price used to be not less than $17.50  per
share and not more than $21.50 per share.

      Financing  for  the cash portion of the transaction will be  through  the
Company's existing $100,000,000 bank revolving credit agreement with Chase Bank
of  Texas,  N.A. as agent bank and through the Company's existing  medium  term
note  program  or new bond financing issued through the private  and/or  public
markets.   As  of August 11, 1999, the Company had $94,000,000 available  under
the bank revolving credit agreement and $121,000,000 available under the medium
term note program.

      Hollywood is engaged in the inland tank barge transportation of chemicals
and  petrochemicals,  refined petroleum products,  black  oil  and  pressurized
products  primarily  along  the Gulf Intracoastal Waterway,  the  Houston  Ship
Channel  and  the lower Mississippi River.  Hollywood operates a fleet  of  256
inland  tank  barges,  with  4.6 million barrels of capacity,  and  104  inland
towboats.


<PAGE>    8
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
             NOTES TO CONDENSED FINANCIAL STATEMENTS - (Continued)
                                       
                                       
(2)  PENDING ACQUISITION - (Continued)

      Hollywood recorded total revenues of approximately $168,000,000  for  the
year  ended December 31, 1998 and approximately $81,700,000 for the six  months
ended  June  30,  1999.   The  closing of the transaction  is  subject  to  the
inspection  of  Hollywood's  inland  tank  barges  and  towboats,  satisfactory
completion  of  an  environmental audit, review of material contracts  and  the
resolution of certain other issues, including a statutory filing under the Hart-
Scott-Rodino  Antitrust Improvements Act. Consummation of  the  transaction  is
expected  in  October 1999.  The transaction will be accounted  for  using  the
purchase method of accounting.

(3)  ADOPTION OF ACCOUNTING STANDARDS

     Statement  of Financial Accounting Standards ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities," ("SFAS No. 133") issued  in
June  1998,  establishes  accounting  and reporting  standards  for  derivative
instruments  and hedging activities.  This statement requires  that  an  entity
recognize  all derivatives as either assets or liabilities in the statement  of
financial position and measure those instruments at fair value.  Based  on  the
May  1999 announcement by the Financial Accounting Standards Board to delay the
implementation date by one year, SFAS No. 133 is now effective for all quarters
of  fiscal years beginning after June 15, 2000.  SFAS No. 133 is effective  for
the  Company's  year  ending December 31, 2001 and is not expected  to  have  a
material effect on the Company's financial position or results of operations.

(4)  COMPREHENSIVE INCOME

     The  Company's  total comprehensive income for the three  months  and  six
months ended June 30, 1999 and 1998 were as follows (in thousands):


<TABLE>
<CAPTION>
                                                 Three months ended      Six months ended
                                                      June 30,               June 30,     
                                                --------------------   -------------------
                                                  1999         1998      1999       1998  
                                                -------       ------   --------    -------
<S>                                             <C>           <C>      <C>         <C>    
Net earnings                                    $6,602        $6,675   $10,603     $11,715
Other comprehensive income (loss), net of tax     (241)          356      (579)        256
                                                 -----         -----    ------      ------
                                                                                         
     Total comprehensive income                 $6,361        $7,031   $10,024     $11,971
                                                 =====         =====    ======      ======
</TABLE>


<PAGE>    9
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
             NOTES TO CONDENSED FINANCIAL STATEMENTS - (Continued)
                                       
                                       
(5)  SEGMENT INFORMATION

     The   following  table  sets  forth  the  Company's  summarized  financial
information  by  reportable segment for the three months and six  months  ended
June 30, 1999 and 1998 (in thousands):


<TABLE>
<CAPTION>
                                    Three months ended      Six months ended
                                          June 30,              June 30,   
                                    -------------------   ---------------------
                                      1999       1998        1999        1998  
                                    --------   --------   ---------   ---------
<S>                                 <C>        <C>        <C>         <C>     
Revenues:                                                                     
  Marine transportation             $63,672    $62,858    $121,401    $122,255
  Diesel engine services             20,383     21,466      41,135      44,324
  Other                                 194        560         381       1,053
                                     ------     ------     -------     -------
                                    $84,249    $84,884    $162,917    $167,632
                                     ======     ======     =======     =======
                                                                              
Segment profit (loss):                                                        
  Marine transportation             $11,415    $10,675    $ 18,318    $ 18,819
  Diesel engine services              2,164      2,355       4,281       4,528
  Other                              (2,901)    (2,316)     (5,499)     (4,541)
                                     ------     ------     -------     -------
                                    $10,678    $10,714    $ 17,100    $ 18,806
                                     ======     ======     =======     =======
                                                                              
Total assets:                                                                 
  Marine transportation                                   $295,149    $314,370
  Diesel engine services                                    37,399      47,614
  Other                                                     46,922      98,742
                                                           -------     -------
                                                          $379,470    $460,726
                                                           =======     =======
</TABLE>



<PAGE>    10
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
             NOTES TO CONDENSED FINANCIAL STATEMENTS - (Continued)
                                       
                                       
(5)  SEGMENT INFORMATION - (Continued)

      The following table presents the details of "Other" segment profit (loss)
for  the  three  months  and  six months ended  June  30,  1999  and  1998  (in
thousands):


<TABLE>
<CAPTION>
                                    Three months ended     Six months ended
                                          June 30,              June 30,
                                    ------------------    -------------------
                                     1999       1998        1999       1998
                                    --------   --------   --------   --------
<S>                                 <C>        <C>        <C>        <C>
General corporate expenses          $(1,135)   $(1,206)   $(2,256)   $(2,367)
Interest expense                     (2,569)    (3,232)    (5,114)    (5,999)
Equity in earnings of affiliates        609      1,562      1,490      2,772
Gain on sale of assets                    3        208         35        244
Other                                   191        352        346        809
                                     ------     ------     ------     ------
                                    $(2,901)   $(2,316)   $(5,499)   $(4,541)
                                     ======     ======     ======     ======
</TABLE>


      The  following table presents the details of "Other" total assets  as  of
June 30, 1999 and 1998 (in thousands):


<TABLE>
<CAPTION>
                                          June 30,
                                    ---------------------
                                      1999          1998
                                    -------       -------
<S>                                 <C>           <C>
General corporate assets            $33,828       $36,868
Investments in affiliates            13,094        61,874
                                     ------        ------
                                    $46,922       $98,742
                                     ======        ======
</TABLE>



<PAGE>    11
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
             NOTES TO CONDENSED FINANCIAL STATEMENTS - (Continued)
                                       
                                       
 (6) TAXES ON INCOME

      Earnings before taxes on income and details of the provision for taxes on
income for the three months and six months ended June 30, 1999 and 1998 were as
follows (in thousands):

<TABLE>
<CAPTION>
                                    Three months ended     Six months ended
                                         June 30,               June 30,
                                    ------------------    -------------------
                                     1999       1998        1999       1998
                                    -------    -------    --------   --------
<S>                                 <C>        <C>        <C>        <C>
Earnings before taxes on income:                                     
  United States                     $10,678    $10,301    $17,100    $17,899
  Puerto Rico                             -        413          -        907
                                     ------     ------     ------     ------
                                    $10,678    $10,714    $17,100    $18,806
                                     ======     ======     ======     ======
                                                                     
Provision for taxes on income:                                       
  United States:                                                     
    Current                         $ 3,341    $ 2,120    $ 4,747    $ 2,625
    Deferred                            495      1,700      1,249      3,988
    State and local                     240        219        501        478
                                     ------     ------     ------     ------
                                      4,076      4,039      6,497      7,091
                                                                     
  Puerto Rico - current                   -          -          -          -
                                     ------     ------     ------     ------
                                    $ 4,076    $ 4,039    $ 6,497    $ 7,091
                                     ======     ======     ======     ======
</TABLE>



<PAGE>    12
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
 
                   Management's Discussion and Analysis of
                 Financial Condition and Results of Operations
                                       
                                       
      Statements  contained  in this Form 10-Q that are not  historical  facts,
including,  but not limited to, any projections contained herein, are  forward-
looking  statements  and  involve a number of risks  and  uncertainties.   Such
statements can be identified by the use of forward-looking terminology such  as
"may,"  "will,"  "expect,"  "anticipate,"  "estimate,"  or  "continue"  or  the
negative  thereof  or other variations thereon or comparable terminology.   The
actual   results  of  the  future  events  described  in  such  forward-looking
statements in this Form 10-Q could differ materially from those stated in  such
forward-looking statements.  Among the factors that could cause actual  results
to differ materially are: adverse economic conditions; industry competition and
other  competitive factors; adverse weather conditions such as high water,  low
water,  fog  and  ice;  marine  accidents; construction  of  new  equipment  by
competitors,   including  construction  with  government  assisted   financing;
government  and  environmental laws and regulations; and the timing,  magnitude
and number of acquisitions made by the Company.

      The Company is a provider of marine transportation services, operating  a
fleet  of  511  inland tank barges and 126 inland towing vessels,  transporting
industrial  chemicals  and  petrochemicals,  refined  petroleum  products   and
agricultural chemicals along the United States inland waterways.   The  Company
also  serves  as  managing partner of a 35% owned offshore marine  partnership,
consisting of four dry-bulk barge and tug units, and as managing partner  of  a
50% owned offshore marine partnership, consisting of one dry-bulk barge and tug
unit.   The  partnerships  are  accounted  for  under  the  equity  method   of
accounting.

      The Company is engaged through its diesel engine services segment in  the
overhaul and servicing of large medium-speed diesel engines employed in marine,
power generation and railroad applications.

RESULTS OF OPERATIONS

      The  Company reported net earnings of $6,602,000, or $.33 per  share,  on
revenues of $84,249,000 for the 1999 second quarter, compared with net earnings
of  $6,675,000,  or  $.31 per share, on revenues of $84,884,000  for  the  1998
second  quarter.   Net earnings for the six months ended  June  30,  1999  were
$10,603,000, or $.52 per share, on revenues of $162,917,000, compared with  net
earnings of $11,715,000, or $.51 per share, on revenues of $167,632,000 for the
1998  first  six  months.   For purposes of this Management's  Discussion,  all
earnings  per  share amounts presented are "Diluted Earnings Per  Share."   The
weighted average number of common shares applicable to diluted earnings for the
second  quarter of 1999 and 1998 were 20,220,000 and 21,738,000,  respectively,
and  for  the  1999  and  1998  first  half  were  20,341,000  and  23,021,000,
respectively.   The  reduction in common shares for the 1999  periods  compared
with  the  applicable  1998  periods primarily  reflected  the  acquisition  of
treasury stock under the Company's Dutch Auction self-tender offer completed on
March  23,  1998 and through open market repurchases during 1998 and the  first
six months of 1999, more fully discussed below.


<PAGE>    13
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       

                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


RESULTS OF OPERATIONS - (Continued)

      The  following table sets forth the Company's revenues and percentage  of
such  revenues for the three months and six months ended June 30, 1999 compared
with  the  three  months  and  six  months ended  June  30,  1998  (dollars  in
thousands):


<TABLE>
<CAPTION>
                                 Three months ended June 30,        
                            ------------------------------------    
                                   1999                1998         Increase (decrease)
                            ----------------    ----------------    -------------------
                            Amounts      %      Amounts      %       Amounts        %  
                            -------     ----    -------     ----    --------      -----
<S>                         <C>         <C>     <C>         <C>     <C>           <C>  
Revenues:                                                                              
  Marine transportation     $63,672      76%    $62,858      74%    $   814         1 %
  Diesel engine  services    20,383      24      21,466      25      (1,083)       (5)
  Other income                  194       -         560       1        (366)      (65)
                             ------     ---      ------     ---       -----       --- 
                            $84,249     100%    $84,884     100%    $  (635)       (1)%
                             ======     ===      ======     ===      ======       ===  
</TABLE>
                                              
                                                                  

<TABLE>                                                                                
<CAPTION>                                                                             
                                 Six months ended June 30,                            
                            ------------------------------------                      
                                  1999                1998         Increase (decrease)
                            ----------------    ----------------   -------------------
                             Amounts     %       Amounts     %      Amounts        %   
                            --------    ----    --------    ----   --------       ----- 
<S>                         <C>         <C>     <C>         <C>    <C>            <C>   
Revenues:                                                                              
  Marine transportation     $121,401     75%    $122,255     73%   $  (854)        (1)%
  Diesel engine services      41,135     25       44,324     26     (3,189)        (7) 
  Other income                   381      -        1,053      1       (672)       (64) 
                             -------    ---      -------    ---     ------        ---  
                            $162,917    100%    $167,632    100%   $(4,715)        (3)%
                             =======    ===      =======    ===     ======        ===  
</TABLE>


      Revenues for the marine transportation segment increased 1% for the  1999
second quarter and decreased 1% for the 1999 first six months compared with the
1998  corresponding  periods.  The 1998 second quarter  and  first  six  months
results  included  approximately $1,800,000 and  $3,600,000,  respectively,  of
revenues from two offshore tank barge and tug units which were sold in  October
1998.

<PAGE>    14
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


RESULTS OF OPERATIONS - (Continued)

      During  the  1999  second  quarter and first  six  months,  chemical  and
petrochemical volumes were solid.  Refined product volumes increased in May and
June  in  anticipation  of  the summer driving season.  Liquid  fertilizer  and
ammonia   volumes,  which  normally  represent  approximately  15%  of   marine
transportation revenues, historically increase during the second  quarter  with
the  spring  planting  season. Volumes in the 1999 second  quarter  fell  below
normal expectations due to high inventory levels in the Midwest. Overproduction
of  nitrogen  in  1998 and 1999, coupled with a 30-year low corn  price,  which
deterred  farmers  from  planting corn, have resulted in  producers  curtailing
plant output of nitrogen products.  The result was decreased shipments by barge
into  the  Midwest  in  the 1999 second quarter compared with  the  traditional
fertilizer  season.  Spot market rates continued to reflect modest  quarter-to-
quarter increases during 1999 and term contracts are generally being renewed at
higher  levels.  During the 1999 second quarter, operating conditions  improved
over  the 1999 first quarter when navigational delays (weather, locks and other
restrictions) lowered the quarter's revenues due to increased transit times.

      For  the  1998  second quarter and first half, chemical and petrochemical
volumes  were  firm and refined product volumes increased in May  and  June  in
anticipation  of  the  summer driving season.  Liquid fertilizer  volumes  were
down,  as  the  Company  experienced a short  fertilizer  season  due  to  high
inventory levels in the Midwest distribution terminals.  Spot market rates  and
contract renewals reflected slight increases.

      The diesel engine services segment's revenues for the 1999 second quarter
and  first six months decreased 5% and 7%, respectively, compared with the 1998
corresponding periods.  The prior year's first quarter and first half, included
approximately  $1,500,000  and $2,800,000, respectively,  of  revenues  from  a
product  line that the segment sold in September 1998.  During the 1999  second
quarter,  continued  strong Midwest and East Coast engine overhauls  and  parts
sales  primarily  offset  the weak Gulf Coast market,  which  continued  to  be
negatively  impacted  by  reduced service work in  the  offshore  oil  and  gas
services sector in the Gulf of Mexico, and slower activity in the shortline and
industrial  railroad  market.  During the 1999 second  quarter  and  first  six
months,  Gulf Coast mechanics were dispatched to the Midwest and East Coast  to
meet the increased demands of those markets.

      The diesel engine services segment's revenues for the 1998 second quarter
and  first six months reflected strong engine overhauls and parts sales in each
of  the segment's markets, including the Gulf Coast market, which continued  to
benefit  from  enhanced drilling and related oil and gas service activities  in
the  Gulf  of Mexico.  The diesel engine services segment's decline in activity
in its Gulf Coast market began in the 1998 third quarter as drilling activities
declined.


<PAGE>    15
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


RESULTS OF OPERATIONS - (Continued)

      Other  income,  comprised  primarily of investment  income  and  gain  on
disposition of assets, declined 65% for the 1999 second quarter and 64% for the
1999  first six months when compared with the 1998 corresponding periods.   The
declines  primarily reflected lower investment income from  securities  of  the
Company's wholly-owned captive insurance subsidiary in 1999 when compared  with
1998  and  the  recognition  of gains from the sale  of  marine  transportation
equipment during the 1998 first and second quarters.

      The  following table sets forth the costs and expenses and percentage  of
each for the three months and six months ended June 30, 1999 compared with  the
three months and six months ended June 30, 1998 (dollars in thousands):


<TABLE>
<CAPTION>
                                              Three months ended June 30,        
                                         ------------------------------------    
                                                1999                1998         Increase (decrease)
                                         ----------------    ----------------    -------------------
                                         Amounts      %      Amounts      %       Amounts        %  
                                         -------     ----    -------     ----    --------      -----
<S>                                      <C>         <C>     <C>         <C>     <C>           <C>  
Costs and expenses:                                                                                 
 Costs of sales and operating expenses   $54,157      76%    $53,963      74%    $   194         - %
 Selling, general and administrative       8,661      12       9,730      13      (1,069)      (11) 
 Taxes, other than on income               1,964       3       1,978       3         (14)       (1) 
 Depreciation and amortization             6,829       9       6,829      10           -         -  
                                          ------     ---      ------     ---      ------       ---  
                                         $71,611     100%    $72,500     100%    $  (889)       (1)%
                                          ======     ===      ======     ===      ======       ===  
</TABLE>


<PAGE>    16
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


RESULTS OF OPERATIONS - (Continued)


<TABLE>
<CAPTION>
                                               Six months ended June 30,         
                                         -------------------------------------    
                                                1999                1998         Increase (decrease)
                                         ----------------    -----------------   -------------------
                                          Amounts       %     Amounts       %     Amounts        %  
                                         --------     ----   --------     ----   --------       ----
<S>                                      <C>          <C>    <C>          <C>    <C>           <C>  
Costs and expenses:                                                                                 
 Costs of sales and operating expenses   $107,095      75%   $108,675      75%   $(1,580)       (1)%
 Selling, general and administrative       17,900      13      19,306      13     (1,406)       (7) 
 Taxes, other than on income                3,689       3       3,959       3       (270)       (7) 
 Depreciation and amortization             13,509       9      13,659       9       (150)       (1) 
                                          -------     ---     -------     ---     ------        --  
                                         $142,193     100%   $145,599     100%   $(3,406)       (2)%
                                          =======     ===     =======     ===     ======        ==  
</TABLE>


      Costs  of  sales  and  operating expenses for  the  1999  second  quarter
increased  less  than  one percent compared with the 1998  second  quarter  and
decreased  1%  for  the 1999 first six months as compared with  the  first  six
months  of  1998.  The 1998 second quarter and first six months included  costs
and  expenses associated with the revenues generated from the two offshore tank
barge and tug units sold in October 1998 and the diesel engine services product
line  sold  in  September  1998.   The costs of sales  and  operating  expenses
applicable  to the assets sold totaled approximately $2,414,000 and  $4,981,000
during the 1998 second quarter and first six months, respectively.


<PAGE>    17
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


RESULTS OF OPERATIONS - (Continued)

      As  noted  above, the marine transportation navigational delays  incurred
during  the 1999 first quarter not only negatively impacted revenues, but  also
increased  operating  expenses.   The ice and high  water  conditions  required
additional  horsepower  to complete the movements, additional  fuel  and  other
variable  expenses.  Costs of sales and operating expenses for the 1999  second
quarter and first six months also reflected the full impact of the overall  20%
afloat  wage  increases implemented during 1998, the result of a  tight  afloat
labor  market.   During 1998, the Company increased afloat compensation  by  6%
effective  March  1, by 11% effective August 1, as well as incurred  additional
costs   from  expanded  longevity  pay,  trip  pay,  travel  pay  and   mileage
reimbursement.   The  20%  increase was necessary not only  to  retain  current
employees,  but  also to increase compensation to levels that were  competitive
with  other industries so as to attract new afloat personnel.  During the  1999
second  quarter  and  first  six  months,  the  marine  transportation  segment
benefited from lower maintenance costs and diesel fuel prices compared with the
corresponding  periods of 1998.  Maintenance and repair  expenditures  for  the
1999  periods are lower as the segment is not competing for shipyard space with
companies participating in the oil and gas drilling activities in the  Gulf  of
Mexico.   The  segment also continued to benefit from continued  costs  savings
from its ongoing cost reduction procurement program.

      Selling, general and administrative expenses decreased 11% for  the  1999
second  quarter and 7% for the 1999 first half compared with the  corresponding
periods  of  1998.   The decrease primarily reflects savings in  administrative
expenses due to the relocation of facilities, continuing cost reduction efforts
and the elimination of offshore and diesel engine services business lines.


<PAGE>    18
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


RESULTS OF OPERATIONS - (Continued)

      The following table sets forth the operating income and operating margins
by  segment  for the three months and six months ended June 30,  1999  compared
with  the  three  months  and  six  months ended  June  30,  1998  (dollars  in
thousands):


<TABLE>
<CAPTION>
                                Three months ended June 30,          
                         ------------------------------------------  
                                1999                  1998          
                         --------------------  --------------------             
                         Operating             Operating             Increase (decrease)
                          income    Operating   income    Operating  -------------------
                          (loss)     margin     (loss)     margin    Amounts         %   
                         ---------  ---------  ---------  ---------  -------       -----
<S>                       <C>         <C>       <C>         <C>       <C>           <C>
Marine transportation     $11,415     17.9%     $10,675     17.0%     $ 740          7 %
Diesel engine services      2,164     10.6%       2,355     11.0%      (191)        (8)
Corporate                  (1,135)               (1,206)                 71          6    
                           ------                ------                ----         --   
                          $12,444               $11,824               $ 620          5 %
                           ======                ======                ====         ==
</TABLE>



<TABLE>
<CAPTION>
                                 Six months ended June 30,           
                         ------------------------------------------  
                                 1999                  1998          
                         --------------------  --------------------             
                         Operating             Operating             Increase (decrease)
                          income    Operating   income    Operating  -------------------
                          (loss)     margin     (loss)     margin    Amounts         %  
                         ---------  ---------  ---------  ---------  -------       -----  
<S>                       <C>         <C>       <C>         <C>       <C>          <C>  
Marine transportation     $18,318     15.1%     $18,819     15.4%     $(501)        (3)%
Diesel engine services      4,281     10.4%       4,528     10.2%      (247)        (5)
Corporate                  (2,256)               (2,367)                111          5 
                           ------                ------                ----         -- 
                          $20,343               $20,980               $(637)        (3)%
                           ======                ======                ====         == 
</TABLE>


<PAGE>    19
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


RESULTS OF OPERATIONS - (Continued)

      The  following table sets forth the equity in earnings of affiliates  and
interest  expense  for  the three months and six months  ended  June  30,  1999
compared  with the three months and six months ended June 30, 1998 (dollars  in
thousands):


<TABLE>
<CAPTION>
                                              Three months ended              
                                            ----------------------            
                                                   June 30,          Increase (decrease)
                                            ----------------------   -------------------
                                              1999          1998     Amount         %     
                                            --------      --------   ------       ------
<S>                                         <C>           <C>        <C>          <C>   
Equity in earnings of insurance affiliate   $    -        $   413    $(413)       (100)%
Equity in earnings of marine affiliates     $   609       $ 1,149    $(540)        (47)%
Interest expense                            $(2,569)      $(3,232)   $(663)        (21)%    
</TABLE>



<TABLE>
<CAPTION>
                                              Six months ended               
                                                  June 30,          Increase (decrease)
                                            --------------------    --------------------
                                              1999        1998      Amount           %
                                            --------    --------    ------        ------
<S>                                         <C>         <C>         <C>           <C>   
Equity in earnings of insurance affiliate   $     -     $   907     $(907)        (100)%
Equity in earnings of marine affiliates     $ 1,490     $ 1,865     $(375)         (20)%
Interest expense                            $(5,114)    $(5,999)    $(885)         (15)%
</TABLE>


     The  1998  second  quarter  and  first six months  included  $413,000  and
$907,000,  respectively, of equity in earnings from the  Company's  45%  voting
common  stock  interest  and its 100% non-voting preferred  stock  interest  in
Universal Insurance Company ("Universal").  Universal, a property and  casualty
insurance  company, operates exclusively in the Commonwealth  of  Puerto  Rico.
Effective September 30, 1998, the Company sold its remaining 45% voting  common
stock  interest and its 100% non-voting preferred stock interest  in  Universal
for $36,000,000 in cash.


<PAGE>    20
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


RESULTS OF OPERATIONS - (Continued)

      Equity in earnings of marine affiliates reflected a 47% decrease for  the
1999  second  quarter  compared with the second quarter  of  1998,  and  a  20%
decrease  for the 1999 first six months compared with the first six  months  of
1998.  During the 1999 second quarter, a higher percentage of the partnership's
offshore  dry-cargo barge and tug units were operating in the  spot  market  at
lower rates, as compared with the 1998 second quarter, when the majority of the
units  were employed under the partnership's coal and rock contracts at  higher
rates.

      Interest  expense  reflected a 21% decrease for the 1999  second  quarter
compared with the second quarter of 1998, and a 15% decrease for the 1999 first
half  compared with the 1998 first half.  The average debt and average interest
rate  for  the  1999 second quarter was $132,100,000 and 7.27%,  compared  with
$177,400,000 and 7.08% for the second quarter of 1998, respectively.   For  the
1999  first six months, the average debt was $134,000,000 and average  interest
rate was 7.25%.  This compared favorably with average debt of $162,300,000  and
average  interest  rate  of 7.17% for the 1998 first six  months.   The  higher
average  interest rate for the 1999 second quarter and first  six  months  when
compared  with the average interest rate for the corresponding periods reflects
the  significant  reduction in the Company's revolving credit  agreement  which
carries a lower variable interest rate.


<PAGE>    21
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


FINANCIAL CONDITIONS, CAPITAL RESOURCES AND LIQUIDITY

BALANCE SHEET

      Total  assets  as of June 30, 1999 were $379,470,000, a  decrease  of  3%
compared  with $390,299,000 as of December 31, 1998.  The following table  sets
forth  the  significant components of the balance sheet as  of  June  30,  1999
compared with December 31, 1998 (dollars in thousands):


<TABLE>
<CAPTION>
                                                                 Increase (decrease)
                                        June 30,   December 31,  -------------------
                                          1999         1998       Amount         %  
                                        --------   ------------  ---------     -----
<S>                                     <C>          <C>         <C>           <C>     
Assets:                                                                              
 Current assets                         $106,134     $112,358    $ (6,224)      (6)%
 Property and equipment, net             252,749      256,899      (4,150)      (2)
 Investments in marine affiliates         13,094       12,795         299        2  
 Other assets                              7,493        8,247        (754)      (9) 
                                         -------      -------     -------      ---  
                                        $379,470     $390,299    $(10,829)      (3)%
                                         =======      =======     =======      ===  
                                                                                   
Liabilities and stockholders' equity:                                                              
 Current liabilities                    $ 70,373     $ 65,940    $  4,433        7 %
 Long-term debt                          122,969      137,552     (14,583)     (11) 
 Deferred taxes                           40,605       40,045         560        1  
 Other long-term liabilities               6,165        5,722         443        8  
 Stockholders' equity                    139,358      141,040      (1,682)      (1) 
                                         -------      -------     -------      ---  
                                        $379,470     $390,299    $(10,829)      (3)%
                                         =======      =======     =======      ===  
</TABLE>


      Working  capital as of June 30, 1999 totaled $35,761,000, a 23%  decrease
compared  with $46,418,000 at December 31, 1998.  Available-for-sale securities
decreased  16%  due  to  the Company's use of its captive insurance  subsidiary
during  1999 for only the procurement of reinsurance in international  markets.
Trade  accounts  receivable decreased 9%, reflecting the  Company's  continuing
emphasis  on  reducing  collection time on trade accounts  receivable.   Diesel
engine services inventories decreased 6%, reflecting the Company's emphasis  on
inventory  management.  Trade accounts payable increased 56%,  principally  the
result  of accruals for reinsurance premiums and marine transportation shipyard
invoices.


<PAGE>    22
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY - (Continued)

      Long-term  debt,  less  current portion, decreased  11%,  the  result  of
favorable net cash provided by operating activities during the 1999 first  half
of $32,519,000.  During the 1999 first half, the Company incurred $9,382,000 of
capital  expenditures.   In  addition, the  Company  purchased  $11,838,000  of
treasury  stock  through  open  market common  stock  repurchases,  more  fully
described below.

      Stockholders'  equity as of June 30, 1999 decreased 1%  during  the  1999
first  half, reflecting the $11,838,000 of treasury stock purchases, more fully
described below, net of $10,603,000 of net earnings.

TREASURY STOCK PURCHASES

      During  the  1999 first half, the Company purchased in  the  open  market
683,000  shares  of  its common stock at a total price of $11,838,000,  for  an
average price of $17.33 per share.  During the 1999 second quarter, the Company
purchased  22,000  shares  of its common stock at a  total  purchase  price  of
$409,000,  for  an  average  price of $18.56 per  share.   The  treasury  stock
purchases  were  financed  by  borrowing under the Company's  revolving  credit
agreement.

      On  April 20, 1999, the Board of Directors increased the Company's common
stock  repurchase authorization to 6,250,000 shares, an increase  of  2,000,000
shares  over  the  2,250,000 shares authorized in October  1995  and  2,000,000
shares  authorized  in August 1994.  The Company, as of  August 11,  1999,  had
2,392,000 shares available under the repurchase authorization.  The Company  is
authorized to purchase its common stock on the New York Stock Exchange  and  in
privately  negotiated  transactions. When  purchasing  its  common  stock,  the
Company  is  subject to price, trading volume and other market  considerations.
Shares purchased may be used for reissuance upon the exercise of stock options,
in future acquisitions for stock or for other appropriate corporate purposes.

LIQUIDITY

      The  Company  generated  net  cash provided by  operating  activities  of
$32,519,000  and $30,781,000 for the six months ended June 30, 1999  and  1998,
respectively.   The 1999 first half was positively impacted  by  an  $8,628,000
increase in cash flow, resulting from changes in working capital, compared with
a  $1,632,000  increase in the 1998 first six months.  For the  1999  and  1998
first six months, the Company received net cash from the marine partnerships of
$1,191,000 and $2,720,000, respectively.


<PAGE>    23
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY - (Continued)

      Funds generated are available for capital construction projects, treasury
stock  repurchases, acquisitions, repayment of borrowings associated with  each
of the above and for other operating requirements.  In addition to its net cash
flow  provided  by operating activities, the Company also has available  as  of
August 11,  1999,  $94,000,000  under  its Credit  Agreement  and  $121,000,000
available  under  its  medium  term  note  program.   The  Company's  scheduled
principal payments during the next 12 months are $50,333,000.  On June 1, 2000,
$45,000,000  of  the  Company's  medium term notes  mature.  These  notes  were
classified  as  long-term at June 30, 1999 as the Company has the  ability  and
intent to refinance the notes through available credit facilities.

      During the last three years, inflation has had a relatively minor  effect
on the financial results of the Company.  The marine transportation segment has
long-term  contracts  which generally contain cost escalation  clauses  whereby
certain  costs,  including fuel, can be passed through to its  customers.   The
repair  portion  of the diesel engine services segment is based  on  prevailing
current market rates.

     The Company has no present plan to pay dividends on its common stock.

YEAR 2000

      Certain  computer systems, software programs and semiconductors  are  not
capable  of recognizing certain dates in 1999 and after December 31, 1999,  and
will read dates in the year 2000 and thereafter as if those dates represent the
year  1900 or thereafter, or will fail to process those dates.  This "Year 2000
Issue"  could  result in the failure of certain systems or  other  errors  that
could disrupt normal business activities.
     
     The  Company has designed and implemented an action plan to determine  the
likely exposures of the Company and its subsidiaries to the Year 2000 Issue and
to  take  the necessary action to minimize the impact of those exposures.   The
Company's  Year 2000 action plan addresses both internal and external exposures
to the Year 2000 Issue.

      With  respect  to the Company's internal Year 2000 Issue  exposures,  the
action plan addresses both land-based and vessel-based systems.  The land-based
systems  include  all  of  the  Company's network  components,  core  corporate
software   applications,  personal  computers,  telephone   systems,   building
management  control  systems and critical office equipment.   The  vessel-based
systems  include  electronic navigation equipment,  diesel  engine  controlling
systems, and fire and other emergency monitors and alarms.


<PAGE>    24
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY - (Continued)

      The  Company's external exposures to the Year 2000 Issue include  vendors
and suppliers of critical services including communications, fuel and supplies,
barge cleaning and repair, and government waterways maintenance and management.
The  Company's external exposures also include general business support systems
such  as  electric power, telephone and banking services, as well as customers'
accounts payable systems.  The Company may experience Year 2000 problems  as  a
result  of these external exposures.  The Company is attempting to address  all
Year  2000  exposures  in  advance;  however,  the  Company  could  potentially
experience temporary disruptions to certain aspects of activities or operations
as  a  result  of  the external exposures noted above.  It is not  possible  to
determine whether, or to what extent, any or all of these exposures are  likely
to  occur or the costs involved in any of the exposures.  However, the costs to
the Company could be material.

      The  Company's Year 2000 action plan divides the Company's  actions  with
respect  to  its  internal and external exposures to the Year 2000  Issue  into
three sequential stages:

     * INVESTIGATION.   This stage, substantially completed in the  1999  first
       quarter,  included  a  complete physical inventorying  of  all  computer
       systems,  software  applications,  and  equipment  relying  on  computer
       software  or  embedded semiconductors.  The Company  has  completed  the
       process  of  mailing requests for Year 2000 Issues to the  manufacturers
       and  distributors  of  the systems and equipment.  Responses  have  been
       positive,  as  most  manufacturers and distributors have  indicated  the
       Year 2000 status of their equipment or systems as Year 2000 compliant.
       
     * REMEDIATION.   This  stage involves the repair  or  replacement  of  the
       Company's equipment and systems which have been identified as not  being
       Year  2000  compliant in the investigation stage and the  validation  of
       the compliance of the equipment and systems which have been repaired  or
       replaced.   This  stage has been substantially completed.   The  Company
       continues to be proactive in additional communication with key  systems'
       manufacturers  and distributors to ensure awareness of any unanticipated
       problems that have not been previously addressed.

     * CONTINGENCY  PLANNING.   Based  on the  findings  of  the  investigation
       stage,  the  Company's actions in this stage include the development  of
       business  scenarios likely to result from Year 2000 compliance  failures
       by  external suppliers or their equipment, systems or services, and  the
       development  of remedies to minimize the consequences of  such  failures
       on  the  Company's  business.  Those remedies may  include  preventative
       measures  and  "work around" solutions.  This stage is  expected  to  be
       complete by October 1999.


<PAGE>    25
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY - (Continued)

     While  the  Company expects that the remediation and contingency  planning
stages  of its Year 2000 action plan will be completed as indicated above,  the
Company   must   rely   on   third  parties  including   government   agencies,
manufacturers, distributors, vendors and suppliers, to provide information  and
to take actions which are beyond the Company's control.  While the responses to
the  investigation stage have been positive, it is not possible for the Company
to  predict either the timeliness of the manufacturers or distributors who have
not  responded  to the Company's requests, or the substance of the  information
and  actions  provided  by third parties.  Accordingly,  the  Company  can  not
predict  whether  or to what extent the information provided by  third  parties
will  affect the timely completion of each stage of the Year 2000 action  plan,
as   the   information  provided  by  third  parties  may  require   additional
investigation,   remediation,  and/or  contingency  planning.    Further,   the
Company's  ability  to timely complete its Year 2000 action plan  is  dependent
upon  the  ability  of  third party manufacturers and distributors  to  provide
necessary replacement equipment during the remediation stage.

      The  total amount expended on the Year 2000 action plan through June  30,
1999  is  approximately $100,000.  Remaining costs related  to  the  Year  2000
action  plan  are  not expected to be material.  The Company will  continue  to
utilize  internal resources to assist in the implementation of  the  Year  2000
action  plan.   The  costs expended to date, and the costs  anticipated  to  be
expended  in  the  second half of 1999, do not include the  Company's  internal
costs,  as the Company does not track such costs separately. The costs also  do
not  include  software  upgrades  that, while Year  2000  compliant,  were  not
specifically upgraded for the Year 2000 Issue.  The completion of the Year 2000
action  plan  is expected to significantly reduce both the level of uncertainty
related to the Company's reliance on third parties for Year 2000 compliance and
the possibility of significant interruptions of normal business operations. The
forward-looking  statements  contained in this discussion  should  be  read  in
conjunction  with  the Company's disclosure in the opening  paragraph  of  this
Management's Discussion and Analysis.
                                       
ACCOUNTING STANDARDS

       SFAS  No.  133,  "Accounting  for  Derivative  Instruments  and  Hedging
Activities,"  issued  in  June  1998,  establishes  accounting  and   reporting
standards  for  derivative instruments and hedging activities.  This  statement
requires  that  an  entity  recognize  all  derivatives  as  either  assets  or
liabilities   in  the  statement  of  financial  position  and  measure   those
instruments at fair value.  Based on the May 1999 announcement by the Financial
Accounting  Standards Board to delay the implementation date by one year,  SFAS
No.  133 is now effective for all quarters of fiscal years beginning after June
15, 2000.  SFAS No. 133 is effective for the Company's year ending December 31,
2001  and  is not expected to have a material effect on the Company's financial
position or results of operations.


<PAGE>    26
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                       
                    Management's Discussion and Analysis of
          Financial Condition and Results of Operations - (Continued)


FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY - (Continued)

SUBSEQUENT EVENT

      On  July 29, 1999, the Company announced the signing of an Agreement  and
Plan  of  Merger  with  Hollywood providing for  the  merger  of  Hollywood,  a
privately  held, inland tank barge company based in Houston, Texas, into  Kirby
Inland  Marine,  Inc., a wholly-owned subsidiary of the Company.   The  Company
will  purchase  Hollywood  for  an  aggregate  consideration  of  approximately
$325,000,000,  consisting of approximately $90,000,000 in Kirby  common  stock,
approximately $135,000,000 in cash and the assumption or refinancing of all  or
part of Hollywood's existing debt of approximately $100,000,000.  The number of
shares  of  Kirby  common stock to be issued in the merger will  be  determined
based  on  the average trading price of the common stock on the New York  Stock
Exchange during a twenty day period shortly before the closing, with the  price
used to be not less than $17.50 per share and not more than $21.50 per share.

      Financing  for  the cash portion of the transaction will be  through  the
Company's existing $100,000,000 bank revolving credit agreement with Chase Bank
of  Texas,  N.A. as agent bank and through the Company's existing  medium  term
note  program  or new bond financing issued through the private  and/or  public
markets.   As of  August 11, 1999, the Company had $94,000,000 available  under
the bank revolving credit agreement and $121,000,000 available under the medium
term note program.

      Hollywood is engaged in the inland tank barge transportation of chemicals
and  petrochemicals,  refined petroleum products,  black  oil  and  pressurized
products  primarily  along  the Gulf Intracoastal Waterway,  the  Houston  Ship
Channel  and  the lower Mississippi River.  Hollywood operates a fleet  of  256
inland  tank  barges,  with  4.6 million barrels of capacity,  and  104  inland
towboats.

      Hollywood recorded total revenues of approximately $168,000,000  for  the
year  ended December 31, 1998 and approximately $81,700,000 for the six  months
ended  June  30,  1999.   The  closing of the transaction  is  subject  to  the
inspection  of  Hollywood's  inland  tank  barges  and  towboats,  satisfactory
completion  of  an  environmental audit, review of material contracts  and  the
resolution of certain other issues, including a statutory filing under the Hart-
Scott-Rodino  Antitrust Improvements Act. Consummation of  the  transaction  is
expected  in  October 1999.  The transaction will be accounted  for  using  the
purchase method of accounting.


<PAGE>    27
                KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

 
                         PART II - OTHER INFORMATION
                                       
                                       

Item 1.   Legal Proceedings
-------   -----------------

          For  a detailed explanation of the material pending legal proceedings
          against the Company, please refer to the Form 10-K for the year ended
          December 31, 1998.


Item 6.   Exhibits and Reports on Form 8-K
-------   --------------------------------

(a)       Exhibits:

          11.0     Computation of Earnings per Common Share.

          27.0     Financial Data Schedule.

(b)       Reports on Form 8-K:

          There  were  no reports on  Form 8-K filed for the three months ended 
          June  30,  1999.  On  July 30,  1999, the  Company filed a report  on
          Form 8-K  reporting  the signing of an  Agreement and  Plan of Merger
          with  Hollywood  Marine, Inc.  for the merger of Hollywood into Kirby 
          Inland Marine, Inc., a wholly-owned subsidiary of Kirby.




                                  SIGNATURES

      Pursuant to the requirements of the Securities and Exchange Act of  1934,
the  Registrant has duly caused this report to be signed on its behalf  by  the
undersigned thereunto duly authorized.

                                   KIRBY CORPORATION
                                   (Registrant)


                                   By:  /s/  G. STEPHEN HOLCOMB
                                        ------------------------------
                                        G. Stephen Holcomb
                                        Vice President and Controller


Dated:    August 11, 1999






                                                                  EXHIBIT 11.0

                 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES
                                
                    COMPUTATION OF EARNINGS PER COMMON SHARE

<TABLE>
<CAPTION>
                                              Three months ended   Six months ended 
                                                   June 30,            June 30,     
                                              ------------------   -----------------
                                                1999       1998      1999      1998 
                                              -------    -------   -------   -------
                                                      (in thousands, except         
                                                        per share amounts)          
<S>                                           <C>        <C>       <C>       <C>    
Net earnings                                  $ 6,602    $ 6,675   $10,603   $11,715
                                               ======     ======    ======    ======
                                                                                    
Basic earnings per share:                                                           
Weighted average number of common                                                   
  shares outstanding                           20,103     21,394    20,230    22,701
                                               ======     ======    ======    ======
                                                                    
     Basic earnings per share                 $   .33    $   .31   $   .52   $   .52
                                               ======     ======    ======    ======
                                                                    
Diluted earnings per share:                                         
Weighted average number of common                                          
  shares outstanding                           20,103     21,394    20,230    22,701
Dilutive shares applicable to stock options       117        344       111       320
                                               ------     ------    ------    ------
                                                                    
     Shares applicable to diluted earnings     20,220     21,738    20,341    23,021
                                               ======     ======    ======    ======
                                                                    
     Diluted earnings per share               $   .33    $   .31   $   .52   $   .51
                                               ======     ======    ======    ======
</TABLE>








<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF EARNINGS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-1999
<PERIOD-END>                               JUN-30-1999
<CASH>                                             882
<SECURITIES>                                    17,378
<RECEIVABLES>                                   67,707
<ALLOWANCES>                                       637
<INVENTORY>                                     13,323
<CURRENT-ASSETS>                               106,134
<PP&E>                                         474,488
<DEPRECIATION>                                 221,739
<TOTAL-ASSETS>                                 379,470
<CURRENT-LIABILITIES>                           70,373
<BONDS>                                        122,969
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                         3,091
<OTHER-SE>                                     136,267
<TOTAL-LIABILITY-AND-EQUITY>                   379,470
<SALES>                                         30,043
<TOTAL-REVENUES>                               162,917
<CGS>                                           23,301
<TOTAL-COSTS>                                  107,095
<OTHER-EXPENSES>                                35,098
<LOSS-PROVISION>                                  (90)
<INTEREST-EXPENSE>                               5,114
<INCOME-PRETAX>                                 17,100
<INCOME-TAX>                                     6,497
<INCOME-CONTINUING>                             10,603
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    10,603
<EPS-BASIC>                                        .52
<EPS-DILUTED>                                      .52
        

</TABLE>