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Kinder Morgan Q4 earnings meet estimates; revenue up 4%

Energy infrastructure company Kinder Morgan (KMI) reported an increase in fourth-quarter revenues, helped mainly by strong contributions from the natural gas business segment. While the top-line missed, earnings came in line with Wall Street estimates.

Kinder Morgan Q4 2018 Earnings Infographic

Adjusted earnings rose to $0.25 per share from $0.21 per share in the fourth quarter of 2017 and matched estimates. Net profit, on a reported basis, was $0.48 billion or $0.21 per share during the three-month period, compared to a net loss of $1.05 billion or $0.47 per share a year earlier.

At $3.78 billion, revenues were up 4% compared the year-ago quarter. The top line benefitted from strong performance by the natural gas business segment but missed analysts’ forecast.

Distributable cash flow grew 7% year-on-year to $1.27 billion in the fourth quarter, aided by positive inputs from the natural gas segment, lower general and administrative expenses and lower preferred equity dividend payments.

“We continued to make progress on two projects critical to the development of resources in the Permian Basin, the Gulf Coast Express and Permian Highway Pipeline projects,” said CEO Steve Kean.

The board of directors approved a cash dividend of $0.20 per share for the fourth quarter, which represents a 60% increase from the same period of the preceding year. The dividend will be paid on February 15, 2019, to stockholders of record on January 31, 2019.

Kinder Morgan meets expectations on Q3 earnings but misses on revenues

Looking ahead, the management expects distributable cash flow to be about $5.0 billion in fiscal 2019 when adjusted EBITDA is anticipated to come in at $7.8 billion. During the fiscal year, a total of $3.1 billion will be invested in growth projects and joint ventures.

Kinder Morgan shares lost about 8% over the past twelve months. The stock ended Wednesday’s trading session slightly higher but lost about 1% in the after-hours trading.

 

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CSX Corp Q4 profit dips 80% but beats estimates

CSX Corp (CSX) reported an 80% dip in earnings for the fourth quarter of 2018 as the previous year quarter included the impacts of restructuring and tax reform benefits. However, the results exceeded analysts’ expectations. The stock declined over 2% in the after-market session following weak outlook for 2019.

Net income plunged 80% to $843 million and earnings dipped 78% to $1.01 per share. The fourth quarter 2017 earnings included a tax reform benefit resulting from tax act and restructuring charge. Adjusted earnings soared 58% to $1.01 per share.

Revenue grew 10% to $3.14 billion driven by increases in fuel recovery, broad-based volume growth, pricing gains, higher supplemental revenue, and favorable mix.

Expenses increased 9% year-over-year to $1.89 billion, or 2% when 2017 results are adjusted for the impacts of restructuring and tax reform benefits. CSX’s operating ratio set a company fourth-quarter record of 60.3% from 60.7% in the prior year or 65.1% on an adjusted basis.

CSX Corp fourth quarter 2018 earnings infographics

Looking ahead into the full year 2019, the company expects low single-digit revenue growth and capital expenditures in the range of $1.6 billion to $1.7 billion. Operating ratio for 2019 is predicted to outperform 2020 target of 60%. Free cash flow is trending ahead of the 3-year forecast of $8.5 billion.

The company announced the Board has authorized $5 billion in share repurchases after the early completion of the existing $5 billion authorization.

CSX’s peer Canadian Pacific (CP) is expected to announce its earnings on January 23 after the bell and the analysts view the company to post earnings of $3.15 per share. Another railroad operator Kansas City Southern (KSU) is expected to post EPS of $1.56 when it reports the quarterly results on Friday.

Shares of CSX ended Wednesday’s regular session up 0.41% at $65.38 on the NYSE. The stock has risen over 12% in the past year while it has fallen over 9% in the past three months.

 

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