Kinder Morgan Delivers Excellent Second-Quarter Results

The Kinder Morgan family of companies, including Kinder Morgan Energy Partners and El Paso Pipeline Partners, is out with second-quarter results.

Jul 16, 2014 at 5:11PM

Kinder Morgan (NYSE:KMI) is out with second-quarter results. The company reported revenue of $3.93 billion and earnings of $284 million, or $0.27 per share. That missed analysts' estimates by a penny, though revenue beat by $150 million. However, a more meaningful number for Kinder Morgan is its cash available to pay dividends, which was up 13% from last year to $332 million. Moreover, the company remains on track to meet or exceed its annual budget of $1.78 billion in cash available to pay dividends.

What fueled Kinder Morgan's results this quarter was its MLP Kinder Morgan Energy Partners (NYSE:KMP). The partnership delivered strong results this quarter as distributable cash flow was up 11% from last year to $561 million. Growth was led by outstanding results from the company's Tennessee Gas Pipeline, contributions from the Copano Energy acquisition and increased oil production from SACROC. Looking ahead, Kinder Morgan Energy Partners also expects to meet or exceed its targets for distributions to investors.

The other big contributor to Kinder Morgan's results were the solid results from its other MLP El Paso Pipeline Partners (NYSE:EPB). The partnership reported distributable cash flow of $141 million, which was up 9% from last year's second quarter. Fueling El Paso Pipeline Partners results were the $2 billion in dropdown transactions from Kinder Morgan that it completed in the quarter. In addition to that El Paso Pipeline Partners saw good performance at Colorado Interstate Gas. Together these solid contributions helped to partially offset lower income from elsewhere within El Paso Pipeline Partners portfolio.

Overall, the Kinder Morgan family of companies delivered solid second quarter results. All three companies remain on track to meet or exceed full-year distributions to investors. Meanwhile, organic growth projects across all platforms should continue to fuel growth in the quarters ahead. 

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Matt DiLallo has the following options: short January 2016 $32.5 puts on Kinder Morgan and long January 2016 $32.5 calls on Kinder Morgan. The Motley Fool recommends El Paso Pipeline Partners and Kinder Morgan. The Motley Fool owns shares of Kinder Morgan. 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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