Is There A Dividend Bubble: Kinder Morgan Edition
Ian Bezek • 335 Comments
Ian Bezek • 335 Comments
Cutting The Dividend Now Will Increase Kinder Morgan's Value
Andrew Walker, CFA • 186 Comments
Andrew Walker, CFA • 186 Comments
Wed, Jul. 20, 6:56 PM
- Kinder Morgan (NYSE:KMI) -4.9% AH after reporting in-line Q2 earnings but maintaining its dividend at the same level as the prior two quarters, disappointing investors who had hoped for a bump.
- KMI says it will pay a $0.125/share quarterly dividend, which amounts to a 2.26% dividend yield, and indicated that the payout would stay at that level for the rest of 2016, as it says it will work to fund growth investments and strengthen its balance sheet.
- Q2 revenues fell 9% Y/Y to a below consensus $3.14B, driven by a 15% decline at its carbon dioxide segment, which has been under pressure because it has more exposure to low commodities prices than KMI's other businesses.
- Q2 distributable cash flow totaled $0.47/share, down from $0.50 in the year-ago quarter and from $0.58 in Q1.
- KMI again reduces its 2016 capex forecast by $500M to a total of $2.8B after cutting its capital budget in January and April; current project backlog is $13.5B, down from $14.1B at the end of Q1, citing lower capital expenses stemming from the partnership with Riverstone on the Utopia project.
- KMI says it continues to expect 2016 distributable cash flow in excess of dividends will exceed growth capex, and does not expect to need to access the capital markets to fund growth projects for the foreseeable future beyond 2016.
Wed, Jul. 20, 4:26 PM
Tue, Jul. 19, 5:35 PM
Wed, Apr. 20, 6:48 PM
- Kinder Morgan (NYSE:KMI) -3% AH after missing Q1 earnings estimates on 11% lower revenues of $3.2B, and scaling back expectations.
- KMI says it is further cutting its 2016 capital spending plans to $2.9B from $3.3B in January, and paring its backlog of projects to be built in the next five years to $14.1B from $18.2B.
- The backlog reduction is driven by the removal of the Northeast Energy Direct Market project due to insufficient interest from customers and the Palmetto Pipeline after it was blocked by regulators.
- KMI says its budgeted distributable cash flow available to common equity holders is ~$4.7B and budgeted EBITDA is ~$7.5B, but because of continued weakness in the energy sector, it now expects EBITDA of ~3% below plan and distributable cash flow of ~4% below plan.
- KMI says it expects to declare dividends of $0.50/share for 2016 and use cash in excess of dividend payments to fund growth investments and strengthen its balance sheet.
- KMI also says it expects to generate excess cash sufficient to fund its growth capital needs without needing to access capital markets and expects to achieve its targeted year-end debt to EBITDA ratio of 5.5x.
- Now read Kinder Morgan: When it rains it pours
Wed, Apr. 20, 4:08 PM
Tue, Apr. 19, 5:35 PM| Tue, Apr. 19, 5:35 PM | 16 Comments
Wed, Jan. 20, 7:19 PM
- Kinder Morgan (NYSE:KMI) +2.5% AH after reporting below consensus Q4 earnings and revenue, but distributable cash flow fell only slightly to $1.23B from $1.28B in the prior-year quarter.
- KMI says it has cut its 2016 spending plans by $900M to a total of $3.3B, trimmed its project backlog by $3.1B from $21.3B in Q3 2015, and expects further reductions in the coming months; the company is not yet specifying which projects are pushed back or canceled.
- For FY 2016, KMI expects to generate $4.7B of distributable cash flow available to common shareholders and $3.6B of cash flow in excess of its dividend.
- Following KMI's Q4 $1.15B non-cash goodwill writedown on midstream natural gas assets and $285M writedown primarily in its carbon dioxide segment, CFO Kimberly Dang warns in the earnings conference call that more impairments could lie ahead if commodity and equity prices continue to fall.
- KMI slashed its dividend by 75% last month, a difficult decision but one the company says "has completely eliminated our need to access the capital markets to fund growth projects in 2016."
Wed, Jan. 20, 4:11 PM
- Kinder Morgan (NYSE:KMI): Q4 EPS of -$0.29 may not be comparable to consensus of $0.18.
- Revenue of $3.64B (-7.8% Y/Y) misses by $260M.
Tue, Jan. 19, 5:35 PM
Oct. 21, 2015, 6:30 PM
- Kinder Morgan (NYSE:KMI) -4.5% AH after Q3 earnings fell to $186M, or $0.08/share, from $329M, or $0.32/share in the year-ago quarter, on a 14% Y/Y drop in revenues to $3.71B, hurt by continued weakness in its carbon dioxide segment due to weak commodities prices.
- KMI says it would raise its quarterly dividend by $0.02/share to $0.51, for an annual payout of $2.04; it expects to increase its dividend by 6%-10% in 2016, compared with its target of a 10% increase each year during 2016-20.
- Q3 adjusted distributable cash flow rose to $1.1B from $435M a year ago.
- KMI says its backlog of expansion and JV investments reached $21.3B vs. $22B in Q2, after completing nearly $400M of projects in Q3 while removing ~$1B in projects, mostly in the CO2 business, as low commodities prices have led to delays in projects.
- Q3 profit in the CO2 segment, which has more exposure to commodity price fluctuations, fell 22% Y/Y to $282M; elsewhere, the natural gas pipelines segment posted earnings of $975M vs. $978M a year ago, pipeline products earnings grew 29% to $287M, and profit in the terminals business rose 6.5% to $263M.
- KMI also says will move away from selling equity to raise money, as low share prices have made financing new projects through stock sales more expensive, but did not say where it will turn instead.
- "We have options, and we can stay out of the common equity market for a significant period of time," CEO Steve Kean said in the earnings conference call, but when pressed by analysts for specifics about how KMI would replace a fund-raising source that netted $1.28B in Q3, he said "you’ll know it when you know it."
Oct. 21, 2015, 4:09 PM
- Kinder Morgan (NYSE:KMI): Q3 EPS of $0.08 may not be comparable to consensus of $0.19.
- Revenue of $3.71B (-13.5% Y/Y) misses by $70M.
Oct. 20, 2015, 5:35 PM| Oct. 20, 2015, 5:35 PM | 7 Comments
Jul. 15, 2015, 7:27 PM
- Kinder Morgan (NYSE:KMI) +0.5% AH despite missing Q2 earnings and revenue expectations, after raising its dividend to remain on track to meet its full-year dividend target of $2/share, and maintaining distribution coverage above 1x.
- KMI says Q2 earnings in its natural gas pipeline segment rose 1% to $965M, led by contributions from the Hiland Partners acquisition and improved performance on the EagleHawk pipeline.
- Q2 earnings in the pipeline products segment gained 32% to $275M, and earnings in the terminals business added 19% to $271M; profit in the carbon dioxide segment, which has more exposure to commodity price fluctuations, fell 20% to $286M.
- KMI also says it added $3.7B to its backlog of planned investment, most of it from a $3.3B portion of the Northeast Energy Direct pipeline, which will bring natural gas to markets near New York and Massachusetts.
- In the earnings conference call, John Schlosser, head of the terminals division, says KMI is considering more export opportunities from Texas and the U.S. northeast, including liquid petroleum gas, refined products and potentially crude.
Jul. 15, 2015, 4:14 PM
- Kinder Morgan (NYSE:KMI): Q2 EPS of $0.15 misses by $0.04.
- Revenue of $3.46B (-12.2% Y/Y) misses by $500M.
Jul. 14, 2015, 5:35 PM
Kinder Morgan, Inc. operates as a holding company. It owns and operates pipelines and terminals that transport natural gas, gasoline, crude oil, carbon dioxide and other products and stores petroleum products, chemicals and handle bulk materials like ethanol, coal, petroleum coke and steel. The... More
Sector: Basic Materials
Industry: Oil & Gas Pipelines
Country: United States
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