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Kinder Morgan Energy Partners Misses Where it Counts

Kinder Morgan Energy Partners (NYSE: KMP  ) reported earnings on July 17. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Kinder Morgan Energy Partners beat expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share grew significantly. GAAP earnings per share grew.

Gross margins dropped, operating margins dropped, net margins expanded.

Revenue details
Kinder Morgan Energy Partners notched revenue of $3.02 billion. The nine analysts polled by S&P Capital IQ predicted net sales of $2.68 billion on the same basis. GAAP reported sales were 55% higher than the prior-year quarter's $1.95 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.49. The 14 earnings estimates compiled by S&P Capital IQ predicted $0.61 per share. Non-GAAP EPS of $0.49 for Q2 were 32% higher than the prior-year quarter's $0.37 per share. (The prior-year quarter included -$0.82 per share in earnings from discontinued operations.) GAAP EPS were $2.63 for Q2 against -$0.53 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 38.8%, much worse than the prior-year quarter. Operating margin was 19.9%, 590 basis points worse than the prior-year quarter. Net margin was 33.1%, much better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $2.69 billion. On the bottom line, the average EPS estimate is $0.56.

Next year's average estimate for revenue is $10.83 billion. The average EPS estimate is $2.67.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,507 members out of 1,559 rating the stock outperform, and 52 members rating it underperform. Among 396 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 383 give Kinder Morgan Energy Partners a green thumbs-up, and 13 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Kinder Morgan Energy Partners is outperform, with an average price target of $91.81.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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