Kinder Morgan increases dividend, Q3 earnings miss estimates

Kinder Morgan (NYSE: KMI) increased its dividend to $0.25 per share, up 25% over the Q4 2018 period. However, Q3 top and bottom line metrics failed to meet analyst consensus. The midstream firm’s stock has increased 31% in 2019 and up 12% in the last 12 months.

Revenue decreased 9% in the third quarter while adjusted earnings rose 1 cent to $0.22 per share. Analysts were expecting adjusted earnings of 24 cents on sales of $3.45 billion. It’s worth noting that the energy giant last year benefitted from the sale of Trans Mountain.

One of the key metrics tracked by the street is distributable cash flow (DCF). DCF grew 4% to $1.14 billion due to stellar results from the Natural Gas and Product Pipelines segment. On a per-share basis, DCF rose marginally to $0.50 per share with a surplus of $571 million post dividend payments.

Total backlog at the end of the Q3 period stood at $4.1 billion, down $1.6 billion from the last quarter. The reduction in the backlog is attributed to two large projects which are resuming service. Kinder Morgan has added new projects to the tune of $1.2 billion in the first three quarters with majority of the projects from the Natural Gas division.

On the projects front, CEO Steve Kean said, “Also late in September, the first of ten liquefaction units of the Elba Liquefaction project went in commercial service, upon which we began recognizing approximately 70 percent of the full project revenues.”

Looking Ahead

For the fourth quarter, Wall Street is projecting top line of $3.67 billion and adjusted EPS of 27 cents. When it comes to fiscal 2019 period, sales is anticipated at $13.8 billion and non-GAAP earnings of $1 per share.

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