It has been about a month since the last earnings report for Kinder Morgan (KMI). Shares have lost about 2.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Kinder Morgan due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Kinder Morgan, Inc. before we dive into how investors and analysts have reacted as of late.
Kinder Morgan Q2 Earnings Meet Estimates, Revenues Increase Y/Y
Kinder Morgan reported second-quarter 2025 adjusted earnings per share of 28 cents, which met the Zacks Consensus Estimate. The bottom line increased year over year from 25 cents.
Total quarterly revenues of $4.04 billion beat the Zacks Consensus Estimate of $3.88 billion. The top line increased from $3.57 billion in the prior-year quarter.
The better-than-expected quarterly earnings were primarily due to robust natural gas demand and higher contributions from its Natural Gas Pipelines and Terminals segments.
Segmental Analysis
Natural Gas Pipelines: In the June-end quarter, adjusted earnings before depreciation, depletion and amortization expenses (EBDA), including the amortization of the excess cost of equity investments, increased to $1.35 billion from $1.22 billion a year ago. The segment's performance benefited from higher contributions from Texas Intrastate system and Tennessee Gas Pipeline.
Product Pipelines: The segment’s EBDA in the second quarter was $289 million, down from $298 million recorded a year ago. The lower contributions were primarily due to weak commodity prices and the expiration of legacy contracts ahead of KMI’s Double H pipeline conversion to natural gas liquids service. However, higher transport rates and increased volumes — refined products and crude/condensate rose 2% each — partially offset the decline.
Terminals: Kinder Morgan generated a quarterly EBDA of $300 million from the segment, higher than the year-ago period’s $281 million. The segment’s earnings rose due to higher rates from the Jones Act tanker fleet, partly offset by lower coal handling earnings.
CO2: The segment’s EBDA was $145 million, down from the year-ago quarter’s $162 million. This was due to higher renewable natural gas sales volumes, partially offset by lower CO2 and D3 RIN prices.
Operational Highlights
Expenses related to operations and maintenance totaled $773 million, up from $741 million registered a year ago. Total operating costs, expenses, and other expenditures increased to $2,890 million from $2,534 million.
For the second quarter of 2025, KMI’s project backlog rose nearly 6% to $9.3 billion (net of about $750 million in completed projects), up from $8.8 billion at the end of the first quarter.
Balance Sheet
As of June 30, 2025, KMI reported $82 million in cash and cash equivalents. At the quarter's end, its long-term debt amounted to $31.7 billion.
Outlook
For 2025, Kinder Morgan reiterated its projected net income of $2.8 billion (up 8% from the 2024 level) and an Adjusted EPS of $1.27 (up 10%). The company expects dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates a budgeted Adjusted EBITDA of $8.3 billion, up 4% from the previous year’s level.
KMI also forecasts a Net Debt-to-Adjusted EBITDA of 3.8x, excluding potential contributions from the Outrigger Energy II acquisition. These estimates assume average 2025 prices of $68 per barrel for WTI crude and $3.00/MMBtu for Henry Hub natural gas.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Kinder Morgan has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Kinder Morgan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Kinder Morgan, Inc. (KMI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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