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Kinder Morgan (KMI) Q2 Earnings In Line, Revenues Rise Y/Y
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Kinder Morgan, Inc. (KMI - Free Report) reported second-quarter 2024 adjusted earnings per share of 25 cents, in line with the Zacks Consensus Estimate. The bottom line increased from the year-ago quarter’s level of 24 cents.
Total quarterly revenues of $3.6 billion missed the Zacks Consensus Estimate of $3.9 billion. However, the top line increased from $3.5 billion in the prior-year quarter.
The in-line quarterly results were primarily due to higher financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. However, there was an increase in total costs and expenses during the quarter.
Kinder Morgan, Inc. Price, Consensus and EPS Surprise
Kinder Morgan announced a quarterly cash dividend of 28.75 cents per share for the second quarter of 2024 (annualized dividend of $1.15). This represents a 2% increase from the second-quarter 2023 level. The dividend is payable on Aug 15, 2024, to shareholders of record as of Jul 31, 2024.
Segmental Analysis
Natural Gas Pipelines: In the June-end quarter, adjusted earnings before depreciation, depletion and amortization expenses, including the amortization of the excess cost of equity investments (EBDA), increased to $1.23 billion from $1.20 billion a year ago. The segment's performance benefited from increased contributions from the Texas Intrastate system and additional inputs from the STX Midstream acquisition. However, this was partially offset by reduced contributions from gathering systems due to asset divestitures and lower commodity prices.
Product Pipelines: The segment’s EBDA in the second quarter was $301 million, up from $286 million recorded a year ago. Higher interest rates on existing assets, combined with financial contributions from newly launched capital projects, primarily supported the segment’s performance.
Terminals: Kinder Morgan generated quarterly EBDA of $281 million from the segment, higher than the year-ago period’s $261 million. Liquid terminal expansions and higher rates on Jones Act tankers boosted Terminals. Additionally, the bulk business benefited from increased coal, petroleum coke and soda ash volumes.
CO2: The segment’s EBDA was $164 million, down from the year-ago quarter’s $175 million. The underperformance resulted primarily from lower CO2 sales volumes.
Operational Highlights
Expenses related to operations and maintenance totaled $741 million, up from $685 million registered a year ago. Total operating costs, expenses, and other expenditures also rose to $2,534 million from $2,471 million.
Distributable Cash Flow (DCF)
Kinder Morgan’s second-quarter DCF was $1.10 billion compared with $1.07 billion a year ago.
Balance Sheet
As of Jun 30, 2024, KMI reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter's end.
Guidance
Kinder Morgan's projections for 2024 remain unchanged. The company still expects its net income, including earnings from the recently acquired STX Midstream assets, to be $2.7 billion, up 15% from the 2023 level.
Additionally, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figure. It aims to close the year with a net debt-to-adjusted EBITDA ratio of 3.9 times.
Zacks Rank & Stocks to Consider
Kinder Morgan currently carries a Zacks Rank #3 (Hold).
Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value Score of A.
The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $7.29 and $7.17, respectively. The partnership has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $7.15. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Suncor Energy is Canada's premier integrated energy company. The firm boasts an impressive supply chain network, owning significant oil sands and conventional production platforms, along with a strong downstream portfolio. It is one of the best-positioned companies in the energy space, given its access to abundant resources, rich operating experience and technical know-how.
The Zacks Consensus Estimate for SU’s 2024 EPS is pegged at $3.52. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2025 in the past seven days.
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Kinder Morgan (KMI) Q2 Earnings In Line, Revenues Rise Y/Y
Kinder Morgan, Inc. (KMI - Free Report) reported second-quarter 2024 adjusted earnings per share of 25 cents, in line with the Zacks Consensus Estimate. The bottom line increased from the year-ago quarter’s level of 24 cents.
Total quarterly revenues of $3.6 billion missed the Zacks Consensus Estimate of $3.9 billion. However, the top line increased from $3.5 billion in the prior-year quarter.
The in-line quarterly results were primarily due to higher financial contributions from the Natural Gas Pipelines, Products Pipelines and Terminals business segments. However, there was an increase in total costs and expenses during the quarter.
Kinder Morgan, Inc. Price, Consensus and EPS Surprise
Kinder Morgan, Inc. price-consensus-eps-surprise-chart | Kinder Morgan, Inc. Quote
Dividend Hike
Kinder Morgan announced a quarterly cash dividend of 28.75 cents per share for the second quarter of 2024 (annualized dividend of $1.15). This represents a 2% increase from the second-quarter 2023 level. The dividend is payable on Aug 15, 2024, to shareholders of record as of Jul 31, 2024.
Segmental Analysis
Natural Gas Pipelines: In the June-end quarter, adjusted earnings before depreciation, depletion and amortization expenses, including the amortization of the excess cost of equity investments (EBDA), increased to $1.23 billion from $1.20 billion a year ago. The segment's performance benefited from increased contributions from the Texas Intrastate system and additional inputs from the STX Midstream acquisition. However, this was partially offset by reduced contributions from gathering systems due to asset divestitures and lower commodity prices.
Product Pipelines: The segment’s EBDA in the second quarter was $301 million, up from $286 million recorded a year ago. Higher interest rates on existing assets, combined with financial contributions from newly launched capital projects, primarily supported the segment’s performance.
Terminals: Kinder Morgan generated quarterly EBDA of $281 million from the segment, higher than the year-ago period’s $261 million. Liquid terminal expansions and higher rates on Jones Act tankers boosted Terminals. Additionally, the bulk business benefited from increased coal, petroleum coke and soda ash volumes.
CO2: The segment’s EBDA was $164 million, down from the year-ago quarter’s $175 million. The underperformance resulted primarily from lower CO2 sales volumes.
Operational Highlights
Expenses related to operations and maintenance totaled $741 million, up from $685 million registered a year ago. Total operating costs, expenses, and other expenditures also rose to $2,534 million from $2,471 million.
Distributable Cash Flow (DCF)
Kinder Morgan’s second-quarter DCF was $1.10 billion compared with $1.07 billion a year ago.
Balance Sheet
As of Jun 30, 2024, KMI reported $98 million in cash and cash equivalents. Its long-term debt amounted to $28.5 billion at the quarter's end.
Guidance
Kinder Morgan's projections for 2024 remain unchanged. The company still expects its net income, including earnings from the recently acquired STX Midstream assets, to be $2.7 billion, up 15% from the 2023 level.
Additionally, KMI anticipates a DCF of $5 billion ($2.26 per share) and an adjusted EBITDA of $8.16 billion, each indicating 8% growth from the previous year’s reported figure. It aims to close the year with a net debt-to-adjusted EBITDA ratio of 3.9 times.
Zacks Rank & Stocks to Consider
Kinder Morgan currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like Sunoco LP (SUN - Free Report) , SM Energy Company (SM - Free Report) and Suncor Energy Inc. (SU - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value Score of A.
The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $7.29 and $7.17, respectively. The partnership has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $7.15. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Suncor Energy is Canada's premier integrated energy company. The firm boasts an impressive supply chain network, owning significant oil sands and conventional production platforms, along with a strong downstream portfolio. It is one of the best-positioned companies in the energy space, given its access to abundant resources, rich operating experience and technical know-how.
The Zacks Consensus Estimate for SU’s 2024 EPS is pegged at $3.52. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2025 in the past seven days.