Kinder Morgan (KMI) Earnings In Line In Q2, Revenues Miss

Kinder Morgan Inc. (NYSE:KMI) reported second-quarter 2016 earnings of 15 cents a share from continuing operations, in line with both the Zacks Consensus Estimate and the year-ago quarter.

Total revenue for the quarter decreased 8.6% year over year to $3,144.0 million. The reported figure also came in below the Zacks Consensus Estimate of $3,440.0 million.

Dividend

Kinder Morgan maintained its quarterly dividend of 12.5 cents a share (50 cents a share annualized). The dividend is payable on Aug 15 to shareholders on record as of Aug 1, 2016.

Operational Highlights

Total expenses in the quarter were $2,204.0 million, down 14.3% from $2,571.0 million spent in the second quarter of 2015.

Operating income came in at $940.0 million, up 5.4% from the prior-year comparable quarter. Second-quarter net income was $333.0 million, flat year over year.

Financials

The company reported second-quarter distributable cash flow of $1,050.0 million compared with $1,095.0 million in the year-earlier quarter. The decrease is mainly attributable to a decline in its CO2 segment and higher preferred stock dividends.

As of Jun 30, 2016 Kinder Morgan reported $180.0 million in cash and cash equivalents, while long-term debt was $38,113.0 million.

Outlook

Kinder Morgan expects to pay dividends of 50 cents per share in 2016. Due to the prolonged weakness in commodity prices, the company expects EBITDA and distributable cash flow to be below the budgeted amount by 3% and 4%, respectively.

For 2016, Kinder Morgan projects capital expenditure of about $2.8 billion, down $500 million from its budget of about $3.3 billion and $1.4 billion from its initial guidance of about $4.2 billion.

KINDER MORGAN Price, Consensus and EPS Surprise

KINDER MORGAN Price, Consensus and EPS Surprise | KINDER MORGAN Quote

Zacks Rank & Stocks to Consider

Currently, Kinder Morgan carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are Sasol Ltd. (NYSE:SSL) , ReneSola Ltd. (NYSE:SOL) and Dril-Quip, Inc. (NYSE:DRQ) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).