It has been about a month since the last earnings report for Kinder Morgan (KMI Quick QuoteKMI - Free Report) . Shares have lost about 1.7% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Kinder Morgan due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Kinder Morgan Q2 Earnings Beat Estimates

Kinder Morgan reported second-quarter 2023 adjusted earnings per share of 24 cents, beating the Zacks Consensus Estimate by a penny. The bottom line, however, decreased from the year-ago quarter’s 27 cents per share.

Total quarterly revenues of $3,501 million missed the Zacks Consensus Estimate of $4,358 million and declined from $5,151 million in the prior-year quarter.

The better-than-expected quarterly earnings were primarily aided by higher gathering and transport volumes. However, lower contributions from Product Pipelines offset the positives.

Segmental Analysis

Natural Gas Pipelines: In the June quarter, adjusted earnings before depreciation, depletion and amortization expenses, including the amortization of the excess cost of equity investments (EBDA), rose to $1,201 million from $1,133 million a year ago. The reported figure also beat our estimated EBDA of $1,197.5 million for the business unit. Higher gathering and transport volumes primarily aided the segment.

Product Pipelines: The segment’s EBDA in the second quarter was $286 million, reflecting a decline from $299 million a year ago. It also came lower than our estimated figure of $319.5 million. Lower volumes of gasoline and diesel fuels affected the segment.

Terminals: Through the segment, Kinder Morgan generated quarterly EBDA of $261 million, higher than the year-ago period’s number of $253 million and our estimate of $250 million. Increased average charter rates aided the outperformance.

CO2: The segment’s EBDA was recorded at $175 million, down from the year-ago quarter’s figure of $211 million and our estimate of $220.8 million. The underperformance was caused by a decline in realized natural gas liquids and CO2 prices.

Operational Highlights

Expenses related to operations and maintenance totaled $685 million, up from $663 million a year ago and our estimate of $646 million. Total operating costs expenses and other were down to $2,471 million from $4,145 million and our estimate of $3,484.2 million. Notably, our estimate for total operating costs expenses and other was significantly higher since our projection for the cost of sales for second-quarter 2023 was considerably elevated on account of our higher expectations for revenues.

Distributable Cash Flow (DCF)

Kinder Morgan’s second-quarter DCF was $1,076 million compared with $1,176 million a year ago.

Balance Sheet

As of Jun 30, 2023, Kinder Morgan reported $497 million in cash and cash equivalents. Its long-term debt amounted to $28,536 million at the quarter-end.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

At this time, Kinder Morgan has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Kinder Morgan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.