Why Is Kinder Morgan (KMI) Down 12.8% Since Last Earnings Report?

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 $3.99 billion, missing the Zacks Consensus Estimate of $4.16 billion, and decreased from $4.04 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 $1.33 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 $278 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 $266 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 $170 million year-over-year, primarily due to asset divestitures and lower volumes [7]. Operational Highlights - Operations and maintenance expenses totaled $761 million, up from $745 million year-over-year, while total operating costs fell to $2,879 million from $2,937 million [8]. Distributable Cash Flow - Fourth-quarter DCF was $1.26 billion compared to $1.17 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 $29.8 billion [10]. Guidance - For 2025, Kinder Morgan projects net income of $2.8 billion (up 8% from 2024), adjusted EPS of $1.27 (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].