Kinder Morgan (KMI -0.67%), one of the largest energy infrastructure companies in North America, reported its second quarter results on July 16, 2025, for the fiscal quarter ending June 30. The key headline was a substantial revenue beat, with revenue reaching $4.04 billion — $213 million above analyst estimates of $3.83 billion. Adjusted earnings per share (Non-GAAP) came in at $0.28, matching consensus estimates. Net income rose to $715 million, up 24.3 % from the prior-year quarter. The company declared a quarterly dividend of $0.2925, representing a 2 % increase year over year. Overall, the quarter demonstrated operational strength in core pipeline and storage businesses, though free cash flow declined and several business lines showed mixed results.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.28 | $0.28 | $0.25 | 12% |
| Revenue (GAAP) | $4.04 billion | $3.83 billion | $3.57 billion | 13.2% |
| Net Income | $715 million | $575 million | 24.3% | |
| Adjusted EBITDA | $1.97 billion | $1.86 billion | 6% | |
| Free Cash Flow | $1.00 billion | $1.11 billion | (9.4%) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company Overview and Recent Focus
Kinder Morgan is a leading operator of energy infrastructure, specializing in pipeline transportation and storage for natural gas, crude oil, refined products, and carbon dioxide (CO2). Its vast network includes over 66,000 miles of natural gas pipelines and significant storage assets across North America. It serves utilities, energy producers, refiners, and power generators, providing critical links from supply basins to demand centers, export terminals, and end users.
The company's business relies heavily on the stability of regulated and long-term take-or-pay contracts, which provide steady and predictable cash flows. Recent priorities have centered on expanding natural gas capacity, growing its project backlog, and securing new contracts to meet anticipated demand growth — particularly for liquefied natural gas (LNG) exports and power generation. Compliance with environmental and safety regulations, prudent capital investment, and management of competitive risks are also central to its success.
Quarter Highlights: Financial and Operational Performance
The company delivered a robust quarter with revenue up 13.2 % compared to the prior-year period and net income climbing 24.3 %. Its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization — a key measure of operational profitability) set a company record, rising 6 %. This reflects strong core performance in natural gas transportation and storage, supported by ongoing demand for U.S. LNG exports and growing power consumption.
Segment performance was mixed. The Natural Gas Pipelines segment saw a 10 % jump in adjusted segment earnings, with transport volumes up 3 %, driven by higher LNG and power generation deliveries. However, gathering volumes — the amount of raw gas collected directly from wells — dropped 6 %, mainly due to lower production in the Haynesville region. In Products Pipelines, which covers refined products like gasoline and jet fuel, earnings fell by 3 %, even as volumes rose 2 %. The decline was due to weaker commodity prices and the expiration of legacy contracts. In the Terminals segment, adjusted earnings increased 7 %, helped by continued high capacity utilization in liquid storage (94.4 %) and expanded tanker operations on the Gulf Coast. The CO2 and Energy Transition Ventures segment posted a 10 % decrease in earnings, reflecting lower prices for both CO2 and regulatory credits, only partially offset by higher renewables sales volume.
Kinder Morgan's project backlog — which tracks the value of expansion and development projects in progress — grew by $1.3 billion in the quarter, reaching $9.3 billion. About 93 % of this backlog is dedicated to natural gas, with significant new investments in the Trident, Mississippi Crossing, and South System Expansion 4 projects, plus enhancements on Texas and Haynesville systems. These projects are aimed at supporting the rising need for natural gas in U.S. power and export markets. Over half of the backlog supports the power generation sector. Importantly, the company placed $750 million worth of projects in service during the period.
The quarter saw visible progress on environmental and safety initiatives, with no reported major incidents. Expansion of renewable natural gas (RNG) production brought total capacity to 6.9 billion cubic feet per year, and hedging strategies extended protection for commodity prices in renewables and CO2 out to 2028. Management described the federal permitting environment as positive, and continued to actively manage tariff and regulatory risk by preordering materials and securing domestic suppliers, estimating that tariffs would impact project costs by just 1 % for current major developments.
The board declared a quarterly dividend of $0.2925 per share, a 2 % increase year over year. This is part of a multi-year trend of modest, reliable increases, supported by the company's fee-based cash flows and prudent balance sheet management.
Business Model, Trends, and Key Success Factors
The company relies mainly on pipeline transportation and storage contracts, with most revenue secured under long-term, firm agreements. These contracts are often take-or-pay, obliging customers to pay regardless of the amount of energy transported. This model provides insulation from short-term market volatility, making steady capital returns possible even in weak commodity price environments. Still, periodically, weaker segments — such as CO2 and gathering — highlight that not all business lines are equally resilient.
Execution on large capital projects and securing competitive wins for new pipeline capacity is essential. High utilization of key assets, as seen in terminals (94.4 % leased) and tanker fleets (fully leased through 2025), is central to segment profitability. Regulatory compliance and a strong safety record are also required for maintaining operating licenses and community support. The company also notes that expanding in growth areas, such as U.S. South and Southwest, and agile tariff management remain competitive necessities.
Looking Ahead: Guidance and Investor Watchpoints
Management reaffirmed its outlook for fiscal 2025, guiding to net income of $2.8 billion (up 8 %), adjusted earnings per share of $1.27 (up 10 %), and adjusted EBITDA of $8.3 billion (up 4 %). It plans to pay a full-year dividend of $1.17 per share (up 2 %), backed by a targeted net debt-to-EBITDA ratio of 3.8 times. Contribution from the fully integrated Outrigger acquisition is expected to provide upside to this year’s forecast. Guidance assumes a West Texas Intermediate oil price of $68 per barrel and a Henry Hub natural gas price of $3.00 per million British thermal units.
Looking forward, investors should watch trends in natural gas transportation volumes, further backlog growth, and the company’s ability to manage regulatory and cost pressures. Gathering volumes and the performance of CO2/renewables businesses are areas of concern. The ability to secure new contracts for expansions and manage rising capital project costs — even as tariffs and permitting remain in flux — will shape results in coming quarters. Kinder Morgan pays a quarterly dividend of $0.2925 per share, reflecting a 2 % year-over-year increase.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
