Kinder Morgan (KMI) Q1 Earnings Lag: Will the Stock Suffer?
Kinder Morgan Inc. KMI reported first-quarter 2016 earnings of 12 cents a share from continuing operations, which lagged the Zacks Consensus Estimate of 19 cents. The bottom line also deteriorated from 24 cents reported a year ago.
Kinder Morgan Inc. (KMI) EPS BNRI & Surprise Percent - Last 5 Quarters | FindTheCompany
Total revenue for the quarter decreased 11.2% year over year to $3,195.0 million. The reported figure also came in below the Zacks Consensus Estimate of $3,652.0 million.
Currently, the stock is trading at $19.00. We expect the release to lead to stock movement.
Dividend
Despite lackluster earnings, Kinder Morgan did not disappoint its investors. Instead, the company rewarded its shareholders with a quarterly dividend of 12.5 cents a share (50 cents a share annualized). The dividend is payable on May 16 to shareholders on record as of May 2, 2016.
Operational Highlights
Total expenses in the quarter were $2,379.0 million, down 5.6% from $2,519.0 million spent in the first quarter of 2015.
Operating income came in at $816.0 million, down 24.3% from the prior-year comparable quarter. Operating margin was 25.5% compared with approximately 30% in the year-ago quarter. First-quarter net income was $314.0 million as against $419.0 million in the first quarter of 2015.
Financials
The company reported first-quarter distributable cash flow of $1,233.0 million as against $1,242.0 million in the year-earlier quarter. The decrease is attributable to a decline in its CO2 segment and higher preferred stock dividends.
As of Mar 31, 2016 Kinder Morgan reported $175.0 million in cash and cash equivalents, while long-term debt was $40,093.0 million.
Outlook
Kinder Morgan expects to be able to pay dividends of 50 cents per share in 2016. Due to the prolonged weakness in commodity prices, the company expects EBITDA and distributable cash flow to be below the budgeted amount by 3% and 4%, respectively.
For 2016, Kinder Morgan projects capital growth of about $2.9 billion, down $400 million from its budget of about $3.3 billion and $1.3 billion from its initial guidance of about $4.2 billion.
Zacks Rank and Stocks to Consider
Currently, Kinder Morgan carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are ReneSola Ltd. SOL, FutureFuel Corp. FF and Suncor Energy Inc. SU. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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SUNCOR ENERGY (SU): Free Stock Analysis Report
KINDER MORGAN (KMI): Free Stock Analysis Report
RENESOLA LT-ADR (SOL): Free Stock Analysis Report
FUTUREFUEL CORP (FF): Free Stock Analysis Report
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