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Did Kinder Morgan’s 2Q16 Earnings Meet Expectations?

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KMI’s 2Q16 EPS

Kinder Morgan (KMI) reported its 2Q16 earnings on July 20, 2016, after the market close. The company reported net income available to common stockholders of $333 million for the quarter—unchanged from 2Q15. Its distributable cash flow of $1,050 million was lower compared to $1,095 million for 2Q15. Kinder Morgan reported EPS (earnings per share) of $0.15 for 2Q16. Analysts’ adjusted EPS for the quarter stood at $0.144. Analysts estimated an EPS of $0.146 for the quarter.

Net income available to common stockholders was positively impacted by a $39 million payment received for early termination of a customer storage contract.

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The decrease in distributable cash flow for the quarter was partially due to lower contributions from Kinder Morgan’s CO2 segment. The segment’s performance was primarily impacted due to lower commodity prices. The lower cash flows from the CO2 segment were partially offset by increased contributions from the Products Pipelines and Terminals segments.

The above graph compares Kinder Morgan’s EPS estimates with the adjusted EPS over the last ten quarters.

KMI’s 2Q16 dividends

Kinder Morgan announced a cash dividend of $0.125 per share for the quarter—unchanged from the previous quarter. It announced expectations to declare dividends of $0.50 per share for 2016. It intends to “use cash in excess of dividend payments to fund growth investments and strengthen its balance sheet.”

Investors were likely expecting an increase in dividends later in the year. The stock fell 3.4% in after-hours trading.

Enterprise Products Partners (EPD) increased its 2Q16 distributions by 1.3%. Plains All American Pipeline (PAA) announced flat 2Q16 per unit distributions and reduced its 3Q16 distributions by 21%.

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