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Kinder Morgan Energy Beats 4Q Estimates

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By: Micheal Kaufman
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Kinder Morgan Energy Partners, L.P. (KMP), one of the largest publicly traded master limited partnerships (MLPs) in the pipeline business, posted EPS of 83 cents for the fourth quarter (4Q) of fiscal year 2013 (FY13), beating estimates by 3 cents.

The company reported revenues of $3.47 billion, which were 1.15% higher than analysts’ expectations of $3.43 billion.

Chairman and CEO Richard D. Kinder said: “KMP had a strong fourth quarter and a very successful year. We are excited about 2014 and continue to see exceptional growth opportunities across all of our business segments.”

The company divides its operations into five segments. Natural Gas Pipelines is the biggest segment, and contributes more than 40% of total earnings. During the three-month period ending on December 31, the segment generated earnings of $507 million up 31% year-over-year (YoY).

Earnings from the CO2 and Product Pipelines segments also increased 22.1% and 16.6% YoY to $271 million and $169 million respectively. The Terminals segment also reported a 9.6% rise in earnings to $160 million.

The Kinder Morgan Canada segment transports crude oil and refined products from Western Canada to other parts of North America. Earnings for this segment declined 28.1% YoY, to $41 million.

The company raised quarterly dividends to $1.36 per common unit (stock), a 5% increase from a year ago, taking the 12-month dividend yield to 6.7%.

The share price went up 0.73% in pre-market trading to $81.12. The stock is currently trading at one-year forward price-to-earnings multiple of 29.8x.

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