Kinder Morgan (KMI) to Post Q2 Earnings: Is a Beat in Store?

Zacks Equity Research
4 min read
0
In this article:

Kinder Morgan Inc. KMI is scheduled to report second-quarter 2020 earnings on Jul 22.

In the last reported quarter, the leading energy infrastructure company’s earnings met the Zacks Consensus Estimate on increased average tariffs on its refined product pipeline. Notably, Kinder Morgan’s earnings missed the Zacks Consensus Estimate only once and met the same thrice in the trailing four quarters, the average negative surprise being 1.09%. This is depicted in the graph below:

Kinder Morgan, Inc. Price and EPS Surprise

 

Kinder Morgan, Inc. Price and EPS Surprise
Kinder Morgan, Inc. Price and EPS Surprise

Kinder Morgan, Inc. price-eps-surprise | Kinder Morgan, Inc. Quote

Let’s see how things have shaped up prior to this announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for the company’s second-quarter earnings per share of 12 cents has witnessed three upward and one downward revision over the past 60 days. The estimated figure suggests a decline of 45.5% from the prior-year reported number.

The consensus estimate for second-quarter revenues of $2.9 billion indicates a 9.5% decline from the year-ago reported figure.

What Does the Zacks Model Say

Our proven model predicts an earnings beat for Kinder Morgan this time around. The combination of a positive Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Earnings ESP represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Kinder Morgan has an Earnings ESP of +54.17%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Kinder Morgan currently carries a Zacks Rank #3.

Factors to Consider

Being a leading North American midstream energy firm, Kinder Morgan is likely to have generated stable fee-based revenues in the second quarter from its gigantic natural gas transportation network, spreading across roughly 70,000 miles.

Notably, we expect daily transportation volumes of natural gas to have grown year over year in the June quarter. The Zacks Consensus Estimate for transportation volumes through natural gas pipeline is pegged at 39,391 billion British thermal units per day (BBtu/D), compared with the year-ago quarter’s 34,790 BBtu/D.

Importantly, Kinder Morgan’s business model is not significantly exposed to the coronavirus-induced commodity price volatility. This is because the company’s midstream assets are booked by the shippers for long term. Thus, it can be said that the midstream player’s overall operations are likely to have been relatively less affected by the pandemic as compared to upstream energy majors.

Other Stocks to Consider

Investors can consider the following players from the energy space that also have the right combination of elements to post an earnings beat in the to-be-reported quarter:

Baker Hughes Company BKR has an Earnings ESP of +25.00% and is a Zacks #3 Ranked player. The company is scheduled to release second-quarter results before the opening bell on Jul 22. You can see the complete list of today’s Zacks #1 Rank stocks here.

BP plc BP has an Earnings ESP of +2.70% and a Zacks Rank of 3. It is scheduled to report second-quarter results on Aug 4.

ConocoPhillips COP has an Earnings ESP of +16.75% and a Zacks Rank #3. The firm is scheduled to release earnings on Jul 30, before the opening bell.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
ConocoPhillips (COP) : Free Stock Analysis Report
 
BP p.l.c. (BP) : Free Stock Analysis Report
 
Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report
 
Baker Hughes Company (BKR) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.

Advertisement

Recommended Stories

  • Dow Jones Falls As Donald Trump Stock Craters; Cathie Wood Buys This Stock Amid 51% Plunge

    The Dow Jones fell as Elon Musk made a Tesla move. The Donald Trump stock sank on the stock market today. Cathie Wood bought a diving stock.

  • Stock Selloff Spreads as Middle East Tension Rises: Markets Wrap

    (Bloomberg) -- European stocks tumbled, following a selloff in Asia and on Wall Street that was sparked by angst over elevated US interest rates and fueled by signs of fading momentum in China’s economy and rising tensions in the Middle East.Most Read from BloombergBeyond the Ivies: Surprise Winners in the List of Colleges With the Highest ROITrump Media’s $5.3 Billion Selloff Deepens as 270% Rally FizzlesS&P 500 Breaks Below 5,100 as Big Tech Sells Off: Markets WrapIran’s Attack on Israel Spark

  • Trump Media stock tanks on move to issue millions of shares

    Trump Media stock slid as much as 16% on Monday after the parent company of Donald Trump's social media platform, Truth Social, filed to issue more than 21 million shares.

  • Nvidia Reveals 8 'Secrets' For When To Sell Stocks. No. 2 Is Key.

    As top growth stocks like Nvidia test key moving averages, keep in mind these proven rules for when to sell stocks.

  • Tesla layoffs hit high performers, some departments slashed, sources say

    Tesla management told employees Monday that the recent layoffs -- which gutted some departments by 20% and even hit high performers -- were largely due to poor financial performance, a source familiar with the matter told TechCrunch. The layoffs were announced to staff just a week before Tesla is scheduled to report its first-quarter earnings. The move comes as Tesla has seen its profit margin narrow over the past several quarters, the result of an EV price war that has persisted for at least a year.

  • 4 Oversold Stocks to Buy Right Now

    Here are four stocks to buy now that could offer investors upside in the short and long term.

  • Elon Musk Agrees With Jamie Dimon's Warning Of Political Polarization 'Creating Risks That Could Eclipse Anything Since World War II'

    JP Morgan Chase & Co. (NYSE:JPM) CEO Jamie Dimon's annual shareholder letter is a moment investors await to understand the thinking of one of the world's most influential bankers. While there has been speculation of Dimon entering politics, with him even gaining the support of billionaire hedge fund manager Bill Ackman to run for president, JP Morgan shared in a statement that "Jamie has no plans to run for office" and that "he is very happy in his current role." That has not stopped him from oc

  • Dow Jones Futures: Another Ugly Market Reversal; Nvidia Skids, Tesla Tumbles On 'Dark Day'

    Mideast fears and surging yields triggered another ugly market reversal. Nvidia and Microsoft fell while Tesla dived.

  • Bitcoin Halving May Lead to Some Sales, Crypto.com CEO Says

    (Bloomberg) -- Bitcoin selling may become evident as the date of the so-called halving nears but the event is set to bolster the price of the largest digital asset longer term, according to the head of the Crypto.com exchange.Most Read from BloombergBeyond the Ivies: Surprise Winners in the List of Colleges With the Highest ROITrump Media’s $5.3 Billion Selloff Deepens as 270% Rally FizzlesS&P 500 Breaks Below 5,100 as Big Tech Sells Off: Markets WrapIran’s Attack on Israel Sparks Race to Avert

  • BlackRock’s Kapito Says Stocks Are Primed for a Comeback

    (Bloomberg) -- BlackRock Inc.’s Robert Kapito says the stock market is poised to benefit as investors deploy their outsized holdings of cash.Most Read from BloombergBeyond the Ivies: Surprise Winners in the List of Colleges With the Highest ROITrump Media’s $5.3 Billion Selloff Deepens as 270% Rally FizzlesS&P 500 Breaks Below 5,100 as Big Tech Sells Off: Markets WrapIran’s Attack on Israel Sparks Race to Avert a Full-Blown WarApple Faces Worst iPhone Slump Since Covid as Rivals RiseThere’s almo