Kinder Morgan, Inc. KMI reported fourth-quarter 2024 adjusted earnings per share of 32 cents, which missed the Zacks Consensus Estimate of 33 cents. The bottom line improved from 28 cents in the prior-year quarter.
Total quarterly revenues of $3.99 billion missed the Zacks Consensus Estimate of $4.16 billion. The top line decreased from $4.04 billion in the prior-year quarter.
The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures, and lower crude, CO2 and NGL volumes.
Kinder Morgan, Inc. Price, Consensus and EPS Surprise
Kinder Morgan, Inc. Price, Consensus and EPS Surprise
Kinder Morgan, Inc. price-consensus-eps-surprise-chart | Kinder Morgan, Inc. Quote
Segmental Analysis
Natural Gas Pipelines: In the December-end quarter, adjusted earnings before depreciation, depletion and amortization expenses (EBDA), including the amortization of the excess cost of equity investments, increased to $1.44 billion from $1.33 billion a year ago. The segment's performance benefited from higher contributions from Texas Intrastate system, additional contributions from the STX Midstream acquisition and continued increases from expansion projects on the Tennessee Gas Pipeline. However, this was partially offset by lower contributions from the gathering systems due to reduced volumes.
Product Pipelines: The segment’s EBDA in the fourth quarter was $302 million, up from $278 million recorded a year ago. Contributions from the Products Pipelines segment rose due to higher rates in the fourth quarter, and the impact of declining commodity prices in the previous year, partly offset by lower volumes on the Hiland gathering system. Refined product volumes increased 2%, while crude and condensate volumes fell 5%.
Terminals: Kinder Morgan generated a quarterly EBDA of $282 million from the segment, higher than the year-ago period’s $266 million. The segment’s earnings rose due to higher rates from the Jones Act tanker fleet, increased contributions from petroleum coke handling, and higher liquids terminal contributions driven by expansion projects.
CO2: The segment’s EBDA was $162 million, down from the year-ago quarter’s $170 million. The underperformance was primarily due to asset divestitures, lower crude oil, CO2 and NGL volumes, partially offset by contributions from the North McElroy Unit and lower power costs.
Operational Highlights
Expenses related to operations and maintenance totaled $761 million, up from $745 million registered a year ago. Total operating costs, expenses, and other expenditures fell to $2,879 million from $2,937 million.
Distributable Cash Flow (DCF)
Kinder Morgan’s fourth-quarter DCF was $1.26 billion compared with $1.17 billion a year ago.
Balance Sheet
As of Dec. 31, 2024, KMI reported $88 million in cash and cash equivalents. At the quarter's end, its long-term debt amounted to $29.8 billion.
Guidance
For 2025, Kinder Morgan projects a net income of $2.8 billion, up 8% from the 2024 level, and an Adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates budgeted Adjusted EBITDA of $8.3 billion, up 4% from the previous year’s level.
KMI also forecasts a Net Debt-to-Adjusted EBITDA ratio of 3.8x, excluding potential contributions from the Outrigger Energy II acquisition. These estimates assume average 2025 prices of $68 per barrel for WTI crude and $3.00/MMBtu for Henry Hub natural gas.
Zacks Rank & Other Stocks to Consider
Kinder Morgan currently carries a Zacks Rank #2 (Buy).
Investors interested in the energy sector may look at some other top-ranked stocks like SMEnergyCompany SM, Sunoco LP SUN and Range Resources Corporation RRC. While SM Energy and Sunoco presently sport a Zacks Rank #1 (Strong Buy) each, Range Resourcescarries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
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.
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. Sunoco is poised to benefit from the strategic acquisitions aimed at diversifying its business portfolio.
Range Resources is among the top 10 natural gas producers in the United States. Its diversified portfolio is spread between low-risk and long reserve-life Appalachian assets. The company’s extensive inventory of Marcellus resources with low breakeven points is a significant asset. With expanded LPG export capacity, RRC is well-positioned to meet the rising global demand, capitalizing on the role of natural gas as a cleaner-burning fuel amid a low-carbon shift.
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