A month has gone by since the last earnings report for Kinder Morgan (KMI). Shares have added about 9.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Kinder Morgan due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Kinder Morgan Q4 Earnings Beat Estimates
Kinder Morgan reported fourth-quarter 2025 adjusted earnings per share (EPS) of 39 cents, which beat the Zacks Consensus Estimate of 37 cents. The bottom line also increased year over year from 32 cents.
Total quarterly revenues of $4.5 billion beat the Zacks Consensus Estimate of $4.4 billion. The top line also increased from $4 billion in the prior-year quarter.
The strong quarterly results can be primarily attributed to contributions from the Natural Gas Pipelines business segment.
Segmental Analysis
Natural Gas Pipelines: In the December-ended quarter, adjusted earnings before depreciation, depletion and amortization expenses (EBDA) jumped to $1.63 billion from $1.43 billion a year ago. The segment achieved record financial results in the fourth quarter, primarily driven by higher contributions from the Texas Intrastate system, KinderHawk and Outrigger Energy assets. Natural gas transport volumes and gathering volumes were also higher compared with the fourth quarter of 2024.
Product Pipelines: The segment’s EBDA in the fourth quarter was $307 million, an increase from $299 million recorded a year ago. The increase can be attributed to higher transport rates in the quarter compared with the corresponding period of 2024.
Terminals: Kinder Morgan generated a quarterly EBDA of $294 million from the segment, higher than $282 million reported in the year-ago period. Liquids utilization was at 92.9% in the quarter, lower than 95.2% in the prior-year quarter. The segment was aided by the liquids terminals business, supported by increased rates and ancillary fees at the Houston Ship Channel hub.
CO2: The segment’s EBDA was $145 million, plummeting from the year-ago quarter’s $161 million.
Operational Highlights
Expenses related to operations and maintenance totaled $787 million, up from $761 million registered a year ago. However, the total operating costs, expenses and other expenditures increased to $3.14 billion from $2.88 billion.
KMI’s project backlog was reported at $10 billion by the end of the fourth quarter. The midstream energy major added that natural gas projects comprise approximately 90% of its project backlog.
Balance Sheet
As of Dec. 31, 2025, KMI reported $63 million in cash and cash equivalents. At the quarter's end, its long-term debt amounted to $30.6 billion.
Outlook
For this year, the midstream player projected net income attributable to KMI at $3.1 billion and estimated adjusted EPS at $1.36 per share. The company also expects the budgeted Adjusted EBITDA for 2026 to be $8.6 billion. Kinder Morgan, currently carrying a Zacks Rank #3 (Hold), anticipates ending 2026 with its net debt-to-adjusted EBITDA at 3.8x.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Kinder Morgan has a subpar Growth Score of D, a grade with the same score on the momentum front. 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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