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Kinder Morgan, Inc. KMI reported first-quarter 2020 adjusted earnings per share of 60 cents, significantly beating the Zacks Consensus Estimate of 23 cents. The bottom line also increased from the year-ago profit of 24 cents per share.
Total revenues surged to $5,211 million from $3,106 million in the prior-year quarter and beat the Zacks Consensus Estimate of $3,029 million.
The strong quarterly results were aided by higher contribution from Texas intrastate systems and the Tennessee Gas Pipeline during the winter storm in February. Moreover, favorable conditions in the CO2 segment boosted the results. This was partially offset by lower demand for terminal assets and refined products.
The company announced a hike of 3% in first-quarter 2021 dividend from the fourth-quarter 2020 level, as previously planned. The latest dividend of 27 cents per share translates to $1.08 on an annualized basis. The dividend is expected to be paid on May 17 to Kinder Morgan’s shareholders of record as of Apr 30.
Kinder Morgan, Inc. Price, Consensus and EPS Surprise
Kinder Morgan, Inc. price-consensus-eps-surprise-chart | Kinder Morgan, Inc. Quote
Natural Gas Pipelines: For the March quarter of 2021, adjusted earnings before depreciation, depletion and amortization expenses — including amortization of excess cost of equity investments (EBDA) — were up to $2,103 million from $1,196 million a year ago. The figure beat the Zacks Consensus Estimate of $1,137 million. Higher contribution from Texas intrastate systems and the Tennessee Gas Pipeline during the winter storm in February aided the segment. However, natural gas transport volumes decreased from the year-ago period by 3%.
Products Pipelines: The segment’s EBDA for the first quarter was $248 million, reflecting a decline from $269 million a year ago. The figure missed the Zacks Consensus Estimate of $260 million. Reduced demand volumes of refined product, and crude & condensate affected the unit.
Terminals: Through this segment, Kinder Morgan generated quarterly EBDA of $227 million, down from the year-ago period’s $257 million. The figure missed the Zacks Consensus Estimate of $258 million. Lower demand for terminal assets owing to refinery outages caused by the winter storm and the coronavirus pandemic resulted in the underperformance.
CO2: The segment’s EBDA was recorded at $286 million versus a loss of $755 million a year ago. The figure beat the Zacks Consensus Estimate of $131 million. The return of power back to the grid, caused by decreased oil production during the winter storm, aided the segment. This was partially offset by lower realized crude prices and carbon dioxide sales volumes.
Expenses related to operations and maintenance totaled $514 million, down from $620 million a year ago. However, total operating costs increased to $3,325 million for the first quarter from $3,063 million in the corresponding period of 2020, primarily due to higher cost of sales.
Quarterly operating income amounted to $1,886 million, jumping from $43 million a year ago.
The company’s first-quarter distributable cash flow (DCF) was $2,329 million compared with $1,261 million a year ago.
As of Mar 31, 2021, Kinder Morgan reported $1,377 million in cash and cash equivalents, up from the fourth-quarter 2020 level of $1,184 million. The company’s long-term debt amounted to $30,007 million at quarter-end, down from the fourth-quarter level of $30,838 million. Long-term debt to capitalization at first quarter-end was 47.9%. Short-term debt was $2,173 million as of Mar 31.
At first quarter-end, it had more than $3.9 billion of borrowing capacity left under the credit facility.
Notably, Kinder Morgan significantly raised 2021 net income expectation to the range of $2.7-$2.9 billion. The company projects DCF for this year within $5.1-$5.3 billion. In 2021, the leading North American energy infrastructure company expects $900 million to be used in sustaining capital expenditures.
Kinder Morgan’s Louisiana Pipeline’s Acadiana expansion plan is expected to come online by first-quarter 2022.
Zacks Rank & Stocks to Consider
The company currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include CrossAmericaPartners LP CAPL, Enable Midstream Partners, LP ENBL and Holly Energy Partners, L.P. HEP, each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CrossAmerica’s bottom line for first-quarter 2021 is expected to surge 166.7% year over year.
Enable Midstream’s sales figure for 2021 is expected to rise 5.3% year over year.
Holly Energy’s bottom line for 2021 is expected to jump 26.1% year over year.
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