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Will Kinder Morgan’s Revenue Rise in Q1 2019?

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Kinder Morgan’s first-quarter revenue

Analysts expect Kinder Morgan’s (KMI) revenue to rise 8% in the first quarter compared to its previous year’s revenue. Its expected revenue is, however, 3% lower than its seasonally strong fourth-quarter revenue.

Higher oil prices, impressive natural gas volumes, and contributions from growth projects could contribute to Kinder Morgan’s revenue growth in the first quarter. At the same time, weaker natural gas prices during the first quarter may affect the company’s results in the period.

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The graph above shows Kinder Morgan’s revenue compared to the consensus estimate for the last nine quarters. Kinder Morgan exceeded its revenue estimates in four of the last nine quarters, while it missed them in the remaining five.

Kinder Morgan spent $2.3 billion on growth projects in 2018. The contributions from these projects are expected to drive the company’s earnings growth in the first quarter.

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Growth projects

In the first quarter, Kinder Morgan announced an agreement with Tallgrass Energy (TGE) for the transportation of crude oil from the Rockies. The agreement involves Tallgrass Energy’s Pony Express Pipeline and certain Kinder Morgan assets. It also involves the construction of ~200 miles of new pipeline to provide crude oil deliveries to Cushing.

In January, Kinder Morgan, along with its joint venture partners Enbridge (ENB) and Oiltanking, applied with the US Maritime Administration to construct a deepwater crude oil export port in Texas. The port is expected to come into service in 2022.

Enterprise Products Partners (EPD) is scheduled to report its first-quarter earnings results on May 1. Energy Transfer (ET) is expected to report its results around May 8.

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