Kinder Morgan Q2: Earnings Miss, Higher Project Backlog & More

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.