Kinder Morgan Inc - Class P
Q3 2023 Earnings
Did KMI Beat Earnings? Q3 2023 Results
Kinder Morgan delivered a steady but modestly pressured third quarter, posting earnings per share of $0.24 on revenue of $3.91 billion as fee-based strength in its core pipeline businesses was partially offset by meaningful commodity headwinds in its CO2 segment. GAAP net income attributable to KMI fell 8% year-over-year to $532 million, while adjusted EBITDA rose 3% to $1.83 billion, underscoring the durability of the company's largely contracted business model. The CO2 segment was the clearest drag, with adjusted EBDA declining to $175 million from $195 million a year ago as realized NGL prices dropped 18% and volumes softened, a pattern that has nudged full-year results slightly below management's original budget. Elsewhere, Natural Gas Pipelines, Products Pipelines, and Terminals each posted year-over-year EBDA gains, with transport volumes and Jones Act tanker rates providing meaningful lift. Looking ahead, KMI expects natural gas demand to grow more than 20% through 2028, supported by LNG exports and power generation, with a $3.80 billion project backlog roughly 84% weighted toward lower-carbon investments.
- Strong demand for natural gas transportation and storage services
- Natural gas transport volumes up 5% and gathering volumes up 11% YoY
- Higher contributions from Texas Intrastate system, Midcontinent Express Pipeline, and El Paso Natural Gas
- Improved pricing and rate escalations in Products Pipelines
- Meaningfully higher Jones Act tanker charter rates in Terminals segment
- Higher liquids terminal utilization and improving tank lease rates
- Share repurchases benefiting per-share metrics
“This quarter KMI continued to benefit from strong demand for our natural gas transportation and storage services. And the future is bright as we expect natural gas demand to grow by more than 20% through 2028, led by liquefied natural gas (LNG) exports, exports to Mexico and power generation.”
Kinder Morgan CEO, on the earnings call
Forward Guidance & Outlook
For full-year 2023, KMI budgeted net income attributable to KMI of $2.5 billion ($1.12 per share), DCF of $4.8 billion ($2.13 per share), Adjusted EBITDA of $7.7 billion, and dividends of $1.13 per share (2% increase over 2022). The company expects to end 2023 with a Net Debt-to-Adjusted EBITDA ratio of 4.0 times. Management acknowledged results will finish slightly below plan on a full-year basis due to lower-than-expected commodity prices (crude below $85/barrel budget, natural gas below $5.50/MMBtu budget), delayed RNG projects, and higher pipeline integrity expense. The NGL-to-crude ratio has been below the CO2 segment's budgeted 45%. Strong performance in the overall business is partially offsetting these headwinds. KMI expects natural gas demand to grow by more than 20% through 2028, led by LNG exports, exports to Mexico, and power generation.
KMI YoY Financials
KMI Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.