Kinder Morgan Sinks as Profits Fall

24/7 Wall St.

Both Kinder Morgan Energy Partners L.P. (KMP) and Kinder Morgan Inc. (KMI) reported second-quarter results after markets closed. KMP will pay a distribution of $1.39 per common unit, a 5% increase over the $1.32 earnings per common unit paid in the second quarter a year ago. Revenues totaled $3.58 billion, compared with revenues in the same period a year ago of $3.02 billion. The consensus estimate called for revenues of $3.35 billion.

KMI will pay a cash dividend of $0.43 per share, up from $0.40 in the same period a year ago and well above the consensus estimate of $0.29 per share. Revenues totaled $3.94 billion, up from $3.38 billion in the same period a year ago and higher than the consensus estimate of $3.78 billion.

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KMP’s year-over-year profit suffers by comparison to last year when the company posted a gain of $558 million on remeasurement of net assets to fair value. Excluding that gain net income would have been nearly $452 million in 2Q13 compared with $669 million this year.

Chairman and CEO Richard Kinder had this to say about KMI:

Our backlog of expansion and joint venture investments at the Kinder Morgan companies that have a high certainty of completion has grown to $17 billion, up from $16.4 billion at the time of our April earnings release. It is important to note that this increase takes into account approximately $700 million in projects that we placed into service in the second quarter, which means we have added about $1.3 billion to the backlog. More than $4.6 billion of the projects in our backlog are natural gas projects, and there continues to be tremendous demand for gas transportation capacity.

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KMI expects cash to pay dividends of at least $1.78 billion for the 2014 fiscal year of $1.57 per share. KMP expects to distribute $5.58 per common unit in 2014.

Shares of KMI were down about 2.4% in after-hours trading at $36.02 in a 52-week range of $30.81 to $40.29.

Shares of KMP were down about 1.4% in after-hours trading, at $81.21 in a 52-week range of $71.32 to $87.50.

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