Kinder Morgan (KMI) Down 4.8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Kinder Morgan (KMI). Shares have lost about 4.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Kinder Morgan due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Kinder Morgan Q1 Earnings Beat Estimates
Kinder Morgan reported first-quarter 2023 adjusted earnings per share of 30 cents, beating the Zacks Consensus Estimate by a penny. The bottom line, however, decreased from the year-ago quarter’s 32 cents per share.
Total quarterly revenues of $3,888 million missed the Zacks Consensus Estimate of $5,251 million. The top line fell from $4,293 million in the prior-year quarter.
The better-than-expected quarterly earnings were primarily aided by higher gathering and transport volumes. Lower contributions from Product Pipelines offset the positives.
Dividend Hike
Kinder Morgan declares a dividend of 28.25 cents per share for the first quarter, reflecting an increase from 27.75 cents in the prior quarter. The increased dividend is likely to be paid on May 15 to stockholders of record as of the close of business on May 1.
Segmental Analysis
Natural Gas Pipelines: In the March quarter of 2023, adjusted earnings before depreciation, depletion and amortization expenses, including the amortization of the excess cost of equity investments (EBDA), rose to $1,430 million from $1,297 million a year ago. Higher gathering and transport volumes primarily aided the segment.
Product Pipelines: The segment’s EBDA in the first quarter was $251 million, reflecting a decline from $299 million a year ago. Lower volumes of diesel fuel affected the segment.
Terminals: Through the segment, Kinder Morgan generated quarterly EBDA of $254 million, higher than the year-ago period’s number of $238 million. Increased steel volumes and rate escalations aided the unit.
CO2: The segment’s EBDA was recorded at $172 million, down from the year-ago quarter’s figure of $192 million. The underperformance was caused by a decline in realized natural gas liquids (NGL) and CO2 prices.
Operational Highlights
Expenses related to operations and maintenance totaled $639 million, up from $585 million a year ago. Total operating costs expenses and other were down to $2,694 million from $3,269 million.
Distributable Cash Flow (DCF)
Kinder Morgan’s first-quarter DCF was $1,374 million compared with $1,455 million a year ago.
Balance Sheet
As of Mar 31, 2023, Kinder Morgan reported $416 million in cash and cash equivalents. The company’s long-term debt amounted to $29,139 million at the quarter-end.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Kinder Morgan has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Kinder Morgan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report
