Kinder Morgan Inc.
) reported fourth quarter 2013 earnings of 33 cents a share from
continuing operations, failing to meet the Zacks Consensus
Estimate of 36 cents. However, the quarterly earnings increased
from the year-earlier profit level of 32 cents.
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For full-year 2013, Kinder Morgan posted earnings of $1.15 a
share from continuing operations compared with $1.08 recorded in
2012. The earnings also failed to meet the Zacks Consensus
Estimate of $1.16.
Total revenue for the quarter increased 25.8% year over year to
$3,872.0 million. The reported figure surpassed our expectation
of $3,757.0 million. In 2013, total revenue increased to $14,070
million from $9,973 million reported in 2012 and beat the Zacks
Consensus Estimate of $13,507 million.
Kinder Morgan boosted its quarterly dividend to 41 cents a share
($1.64 per share annualized), up 11% from 37 cents ($1.48 per
share annualized) paid in the fourth quarter of 2012.
The company's growth curve will be driven by its ownership of the
general partnership of
Kinder Morgan Energy Partners, L.P.
). The natural gas assets acquired by Kinder Morgan from El Paso
Corporation will also augment dividend growth.
Total expenses in the quarter were $2,712.0 million, representing
a 28.3% increase from $2,114.0 million spent in the fourth
quarter of 2012.
Operating income came in at $1,160.0 million in the quarter,
representing a 20.2% growth from the comparable quarter a year
ago. Operating margin was approximately 30.0% compared with 31.3%
in the year-ago quarter.
Cash available for dividend payments was $482.0 million in the
fourth quarter of 2013, an increase of 10% from $439.0 million in
the comparable quarter last year. For 2013, Kinder Morgan
reported $1,713 million cash available to pay dividends, up 21%
from $1,411 million in 2012 and ahead of the company's published
annual budget of $1,632 million.
Kinder Morgan is one of the largest publicly traded master
limited partnerships (MLPs) and generally serves as a benchmark
for the pipeline MLP group. A focus on fee-based and diversified
businesses has enabled the partnership to dilute its business
risks. Kinder Morgan Inc., one of the largest mid-stream energy
companies in the U.S., owns the partnership's general partner
However, Kinder Morgan remains vulnerable to volatile crude oil
and natural gas prices, imbalance between supply and demand for
its products, and rising interest rates. As such, we expect the
partnership to perform in line with the broader industry and rate
it Neutral on a long-term basis.
Kinder Morgan currently holds a Zacks #3 Rank (short-term Hold
rating). Better-ranked energy players include
Cheniere Energy Partners LP.
Seadrill Partners LLC
). Both these stocks currently sport a Zacks Rank #1 (Strong Buy)
and offer value.