What's In The Cards For Kinder Morgan (KMI) In Q1 Earnings?
Zacks Investment Research | Apr 15, 2018 11:00PM ET
Kinder Morgan Inc (NYSE:KMI) is expected to post first-quarter 2018 results on Apr 18.
Last quarter, the company delivered an earnings surprise of 16.7%. Moreover, Kinder Morgan delivered an average positive earnings surprise of 4.6% in the last four quarters. Let’s see how things are shaping up prior to the announcement.
Which Way are Estimates Treading?
Let’s look at the estimate revisions to get a clear picture of what analysts are thinking about the company before earnings release.
The Zacks Consensus Estimate of 21 cents for the first quarter has been stable in the last 30 days. It reflects improvement of about 23.5% from the year-ago quarter.
Further, analysts polled by Zacks expect revenues of $3,482 million for the impending quarter, showing an increase of 1.7% from the prior-year quarter.
Factors to Consider
Kinder Morgan has the largest network of natural gas pipelines in North America, spread over almost 70,000 miles. Notably, the company’s midstream properties are linked to all the prospective plays in the United States, rich in natural gas.
These extensive networks of natural gas pipelines, for which the company has invested billions of dollars, provide stable fee-based revenues. In fact, Kinder Morgan expects 85% of its cash flow generation to come from fees charged for midstream properties over the coming quarters. The revenues from midstream properties will be reflected in the quarterly results.
However, Kinder Morgan’s weak balance sheet is a concern. As of fourth-quarter 2017, total debt — short and long term — is pegged at $34 billion. Debt capitalization ratio of 49.9% is higher than the Original post
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