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Why Is Kinder Morgan (KMI) Down 12.8% Since Last Earnings Report?
KMIKinder Morgan(KMI) ZACKS·2025-02-21 17:35

Core Viewpoint - Kinder Morgan's recent earnings report showed a decline in both earnings and revenues, leading to a negative trend in share performance, underperforming the S&P 500 [1][2]. Financial Performance - The fourth-quarter adjusted earnings per share were 32 cents, missing the Zacks Consensus Estimate of 33 cents, but improved from 28 cents in the prior-year quarter [2]. - Total quarterly revenues were 3.99billion,missingtheZacksConsensusEstimateof3.99 billion, missing the Zacks Consensus Estimate of 4.16 billion, and decreased from 4.04billionintheprior−yearquarter[2].KeyDriversofPerformance−Thelower−than−expectedearningswereattributedtodecreasedvolumesoncertainsystems,assetdivestitures,andlowercrude,CO2,andNGLvolumes[3].SegmentalAnalysis−∗∗NaturalGasPipelines∗∗:AdjustedEBDAincreasedto4.04 billion in the prior-year quarter [2]. Key Drivers of Performance - The lower-than-expected earnings were attributed to decreased volumes on certain systems, asset divestitures, and lower crude, CO2, and NGL volumes [3]. Segmental Analysis - **Natural Gas Pipelines**: Adjusted EBDA increased to 1.44 billion from 1.33billionyear−over−year,benefitingfromhighercontributionsfromtheTexasIntrastatesystemandSTXMidstreamacquisition,thoughpartiallyoffsetbylowercontributionsfromgatheringsystems[4].−∗∗ProductPipelines∗∗:EBDAroseto1.33 billion year-over-year, benefiting from higher contributions from the Texas Intrastate system and STX Midstream acquisition, though partially offset by lower contributions from gathering systems [4]. - **Product Pipelines**: EBDA rose to 302 million from 278millionyear−over−year,drivenbyhigherratesandrefinedproductvolumeincreasesof2278 million year-over-year, driven by higher rates and refined product volume increases of 2%, while crude and condensate volumes fell by 5% [5]. - **Terminals**: Generated quarterly EBDA of 282 million, up from 266millionyear−over−year,duetohigherratesfromtheJonesActtankerfleetandincreasedcontributionsfromexpansionprojects[6].−∗∗CO2∗∗:EBDAdecreasedto266 million year-over-year, due to higher rates from the Jones Act tanker fleet and increased contributions from expansion projects [6]. - **CO2**: EBDA decreased to 162 million from 170millionyear−over−year,primarilyduetoassetdivestituresandlowervolumes[7].OperationalHighlights−Operationsandmaintenanceexpensestotaled170 million year-over-year, primarily due to asset divestitures and lower volumes [7]. Operational Highlights - Operations and maintenance expenses totaled 761 million, up from 745millionyear−over−year,whiletotaloperatingcostsfellto745 million year-over-year, while total operating costs fell to 2,879 million from 2,937million[8].DistributableCashFlow−Fourth−quarterDCFwas2,937 million [8]. Distributable Cash Flow - Fourth-quarter DCF was 1.26 billion compared to 1.17billionayearago[9].BalanceSheet−AsofDecember31,2024,cashandcashequivalentswerereportedat1.17 billion a year ago [9]. Balance Sheet - As of December 31, 2024, cash and cash equivalents were reported at 88 million, with long-term debt amounting to 29.8billion[10].Guidance−For2025,KinderMorganprojectsnetincomeof29.8 billion [10]. Guidance - For 2025, Kinder Morgan projects net income of 2.8 billion (up 8% from 2024), adjusted EPS of 1.27(up101.27 (up 10%), and dividends of 1.17 per share (up 2%) [12]. - Expected budgeted Adjusted EBITDA is $8.3 billion, up 4% from the previous year, with a Net Debt-to-Adjusted EBITDA ratio forecasted at 3.8x [13]. Estimates and Outlook - Estimates have trended downward over the past month, with a Zacks Rank of 3 (Hold), indicating an expectation of in-line returns in the coming months [14][16].