Kinder Morgan Inc (KMI) reported quarterly earnings results on Wednesday, Jul-20-2016.
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Operating income came in at $940.0 million, up 5.4% from the prior-year comparable quarter. The company’s total bill for next month’s payout will be about $279 million. The company saw revenue figures of $3.144 billion, falling short of our estimate of $3.433 billion.
Kinder Morgan’s Carbon dioxide and Natural Gas Pipeline segments reported a huge decline in earnings in 2Q driven by weak commodity prices.
Since July 2014, crude oil prices have dropped by more than 50% as the gap between oil demand and supply has widened. The Terminals segment includes the operations of its petroleum chemical ethanol and other liquids terminal facilities and all of its coal petroleum coke fertilizer steel ores and other dry-bulk material services facilities. Kinder Morgan Canada’s profits increased from $37 million to $40 million during the same period. The firm has a market cap of $49.30 billion and a PE ratio of 849.62.
We are also pleased with KMI’s operational performance for the quarter despite continued volatile market conditions.
The Houston energy infrastructure provider said its board approved a dividend of 12.5 cents per share, the same as last quarter. This year, the annualized dividend payment is expected to stand at 50 cents per share and will be paid on August 15, 2016.
Kinder Morgan Inc. quashed optimism it might raise dividends this year as North America’s biggest pipeline operator seeks joint-venture partners to raise cash for debt payments.
The company’s stock slid 1.6% in after-hours trading to $21.74 after closing at $22.09 on Wednesday, up more than half a percentage point.
Make sure to check back later for our full coverage of Kinder Morgan’s second-quarter earnings!
Since the end of the first quarter, KMI has made significant progress towards enhancing its credit profile. They set a “neutral” rating for the company. The company has a Return on Assets of 0.10%. That is consistent with the company’s earlier comments and proves that our speculation that Kinder Morgan might raise its dividend was too aggressive. Kinder Morgan predicts distributable cash flow of $4.7 billion for the year and adjusted EBITDA of $7.5 billion. Moreover, given our efforts to high-grade our backlog, we do not expect to need to access the capital markets to fund our growth projects for the foreseeable future beyond 2016.
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The company also further reduced its 2016 capital-spending forecast by $500 million to a total of $2.8 billion.
