Is Kinder Morgan Poised for a Beat in First-Quarter Earnings?

Kinder Morgan, Inc. KMI is set to report first-quarter 2025 earnings on April 16, after the closing bell.

Let us delve into the factors that are anticipated to have affected this pipeline operator’s quarterly performance. However, before that, it would be worth reviewing KMI’s performance in the previous quarter.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Highlights of Q4 Earnings & Surprise History

In the last reported quarter, the company’s adjusted earnings per share of 32 cents missed the Zacks Consensus Estimate of 33 cents, primarily due to decreased volumes on certain systems, asset divestitures, and lower crude, CO2 and NGL volumes.

Kinder Morgan’s earnings beat the Zacks Consensus Estimate in one of the trailing four quarters, met in one and missed in the other two, the average negative surprise being 1.85%. This is depicted in the graph below:

Kinder Morgan, Inc. Price and EPS Surprise

Kinder Morgan, Inc. price-eps-surprise | Kinder Morgan, Inc. Quote

Estimate Trend

The Zacks Consensus Estimate for first-quarter earnings per share of 35 cents has witnessed one upward revision and no downward movement over the past 30 days. The estimate suggests a 2.94% improvement from the prior-year reported numbers.

The top-line estimate of $4.14 billion indicates a 7.66% increase from the year-ago reported figure.

Factors to Note

Kinder Morgan is expected to have maintained a stable performance in the first quarter, bolstered by long-term contracts that ensure consistent cash flows and protect against short-term market fluctuations.

Per EIA, the Natural Gas Henry Hub Spot price increased almost 95% year over year in the first quarter. Higher natural gas prices in parts of the first quarter might have positively impacted Kinder Morgan’s revenues. However, the escalating U.S.-China trade tensions in the quarter must have posed several headwinds for KMI. The trade war has weakened global economic sentiment and lowered energy demand. This decline in energy consumption likely reduced pipeline throughput and revenues for KMI. Additionally, tariffs on imported steel and aluminum — key materials for KMI’s infrastructure projects — should have pushed up drilling and construction costs by roughly 4%, putting pressure on margins. Supply-chain disruptions might have further complicated project timelines and logistics, affecting both operating efficiency and capital project execution.

These factors are anticipated to have weighed on the company’s financial performance in the quarter.

Earnings Whisper

Our proven model does not indicate an earnings beat for Kinder Morgan this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.

Earnings ESP: KMI’s Earnings ESP is -7.25%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #2.

Stocks to Consider

Here are some stocks that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.

Valero Energy Corporation VLO currently has an Earnings ESP of +26% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Valero is scheduled to release first-quarter earnings on April 24. The Zacks Consensus Estimate for VLO’s earnings is pegged at $1.57 per share, suggesting a 58.9% decrease from the prior-year reported figure.

Baker Hughes BKR presently has an Earnings ESP of +1.54% and a Zacks Rank #3.

Baker Hughes is scheduled to release first-quarter earnings on April 22. The Zacks Consensus Estimate for BKR’s earnings is pegged at 48 cents per share, suggesting a 11.63% increase from the prior-year reported figure.

Antero Resources Corporation AR currently has an Earnings ESP of +7.65% and a Zacks Rank #2.

Antero Resources is scheduled to release first-quarter earnings on April 30. The Zacks Consensus Estimate for AR’s earnings is pegged at $0.83 per share, suggesting a 1085% improvement from the prior-year reported figure.

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This article originally published on Zacks Investment Research (zacks.com).

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