Kinder Morgan's Q2 Earnings: Mixed Results and Future Prospects in Natural Gas

Kinder Morgan Q2: Earnings Miss, Higher Project Backlog & More - Kinder Morgan (NYSE:KMI)

Project backlog increased to $5.2B, with 80% allocated to lower-carbon energy investments. Kinder Morgan, Inc. KMI reported second-quarter FY24 revenue of $3.57 billion, missing the consensus of $4.12 billion. Natural Gas Pipelines segment saw improved financial performance Y/Y, driven by higher contributions from the Texas Intrastate system and the STX Midstream acquisition. Also, contributions from the Products Pipelines segment increased Y/Y, aided by higher rates on existing assets and contributions from new capital projects. In the second quarter, earnings in the Terminals business segment exceeded Y/Y, led by new expansion projects coming online and increased rates and utilization at their New York Harbor hub facilities in liquids terminals. CO2 business segment earnings, excluding the gain from a divestiture, were down due to lower crude volumes, CO2 sales, and NGL volumes, down 13%, 8%, and 17% respectively, on a net-to-KMI basis. Adjusted EPS rose 4% Y/Y to $0.25, missing the consensus of $0.26. The project backlog increased to $5.2 billion by the end of the second quarter of FY24 from $3.3 billion in the first quarter of FY24. Kinder Morgan anticipates that the remaining $3.8 billion of projects in the backlog will generate an average Project EBITDA multiple of around 5.4 times. The board of directors approved a cash dividend per share of $0.2875 for the second quarter, payable on August 15, 2024, to stockholders of record as of July 31, 2024. The company generated cash flow from operations of $1.7 billion and $1.1 billion in free cash flow (FCF) after capital expenditures. The company plans to allocate around 80% of its project backlog to investments in lower-carbon energy, such as conventional natural gas, renewable natural gas (RNG), renewable diesel (RD), RD feedstocks, sustainable aviation fuel (SAF), and carbon capture and sequestration initiatives. Richard D. Kinder, Executive Chairman, said, "As I noted last quarter, we expect demand for natural gas to grow substantially between now and 2030, led by more than a doubling of demand for LNG exports and an almost 50% increase in natural gas exports to Mexico." The company expects to be roughly in-line with its budget for the full year (on budget or within 1-2% below). Also Read: Kinder Morgan Acquires West Texas Oilfield To Leverage Carbon Capture Incentives: Report Price Action: KMI shares are up 3.19% at $21.19 at the last check Thursday. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Kinder Morgan GAAP EPS of $0.26 beats by $0.01, revenue of $3.57B misses by $520M (NYSE:KMI)

Kinder Morgan press release (NYSE:KMI): Q2 GAAP EPS of $0.26 beats by $0.01. Revenue of $3.57B (+2.0% Y/Y) misses by $520M. Approves Cash Dividend of $0.2875 Per Share ($1.15 Annualized) DCF of $1,100 million for the quarter, compared to $1,076 million in the second quarter of 2023. For 2024, including contributions from the acquired STX Midstream assets, KMI budgeted net income attributable to KMI of $2.7 billion ($1.22 per share), up 15% versus 2023, and expects to declare dividends of $1.15 per share for 2024, a 2% increase from the dividends declared for 2023. The company also budgeted 2024 DCF of $5 billion ($2.26 per share), and Adjusted EBITDA of $8.16 billion, both up 8% versus 2023, and to end 2024 with a Net Debt-to-Adjusted EBITDA ratio of 3.9 times. More on Kinder Morgan Kinder Morgan: AI Could Be A Profit Catalyst (Rating Upgrade) Kinder Morgan: I Am Bullish On Midstream, But Not In This Case Kinder Morgan: Low-Risk Capacity Expansion Projects Driving Value Growth Kinder Morgan Q2 results preview: Demand and dividend in focus amid AI race Earnings week ahead: BAC, GS, JNJ, TSM, UNH, ABT, UAL, NFLX, AXP and more

Pipeline operator Kinder Morgan Q2 results miss estimates

KINDER MORGAN DE-RESULTS/ (UPDATE 1):UPDATE 1-Pipeline operator Kinder Morgan Q2 results miss estimates (Adds details in paragraphs 6, 7 & 9, share movement in paragraph 2) July 17 (Reuters) - U.S. pipeline and terminal operator Kinder Morgan on Wednesday missed Wall Street estimates for second-quarter profit and revenue, weighed down by higher costs and weakness in its CO2 segment. Shares of the company were down 3.8% in trading after the bell. Kinder Morgan, which is the largest operator of carbon dioxide (CO2) pipelines in North America, said adjusted core profit from the transportation of CO2 fell about 6.3% to $164 million, from $175 million last year. The segment earnings were impacted by lower crude and natural gas liquids volumes and CO2 sales, the company said. The terminal operator's quarterly revenue came in at $3.57 billion, well below analysts' estimates of $4.13 billion, according to LSEG data. Kinder Morgan said it has launched a binding open season on its proposed South System Expansion 4 project, designed to increase Southern Natural Gas (SNG) Pipeline's South Line capacity by 1.2 billion cubic feet per day. CEO Kimberly Dang said the open season is a part of the company's efforts to meet significant new natural gas demand for electric generation associated with artificial intelligence operations, crypto-currency mining, data centers and industrial re-shoring. The company said it continues to have a bullish outlook for natural gas due to demand from LNG export facilities and increased exports from Mexico. This comes at a time when natural gas prices have declined nearly 17.5% since the start of the year. Adjusted core profit from Kinder's natural gas pipeline segment rose nearly 2.5% to $1.23 billion, as higher transport and gathering volumes helped partially offset the impact of asset divestitures and lower commodity prices. The Houston, Texas-based company posted an adjusted profit of 25 cents per share, in the three months ended June 30, narrowly missing analysts' estimates of 26 cents per share. (Reporting by Vallari Srivastava in Bengaluru; Editing by Shailesh Kuber)

Kinder Morgan sees need for data center driven power as strong driver of natgas demand

Kinder Morgan (NYSE:KMI) +3.4% in Thursday's trading to its highest level since February 2020 despite missing Q2 revenue expectations, as executives on the earnings conference call offered a bullish tone on power sector gas demand. The company said artificial intelligence operations and data centers will raise demand for natural gas, adding that reliability of gas will help in increased reliance over other renewable sources. "We're having commercial discussions on over 5B cf/day of opportunities related to power demand, and that includes the 1.6B of data center demand," the company said on the call, according to Reuters. CEO Kim Dang rejected forecasts that power sector gas demand would decline in the second half of the decade, saying "we simply do not believe that will be the case, given the anticipated power-related growth in gas demand associated with AI and data centers, coal conversions, and new capacity to shore up reserve margins and back-up renewables." Kinder Morgan (KMI) reported Q2 adjusted core profit in its natural gas pipeline segment rose 2.5% to $1.23B, as higher transport and gathering volumes partially offset the impact of asset sales and lower commodity prices. The company's proposed South System Expansion 4 Project would boost capacity on Southern Natural Gas Pipeline's South line and "help to meet the growing power demand and local distribution company demand in the southeastern markets," Dang said on the call. The SNG South Line expansion "is a $3B effort, designed to meet AI and data center demand, and also very capital efficient... it is likely to generate very attractive returns for investors," according to Morningstar analyst Stephen Ellis.