Kinder Morgan Inc. (KMI) on Wednesday reported second-quarter earnings largely in line with analyst estimates.
KMI reported better-than-budgeted performance in its natural gas and terminals segments, which was offset by lower than budgeted commodity prices. Despite the base business outperforming, KMI is now forecasting to be slightly below budget for the full year.
In the first half, crude oil and natural gas prices were below KMI’s full year 2023 budget assumptions of $85 per barrel and $5.50 per MMBtu, respectively. The company’s NGL to crude ratio was below its budgeted ratio of 45%. The company said it expects strong performance in its overall business to partially offset the weaker pricing.
During the second quarter, KMI generated adjusted EBITDA of $1.805 billion, compared to $1.819 billion in the second quarter of 2022, representing a 1% decrease, according to a statement from the firm.
KMI ended the first quarter with a Net Debt-to-Adjusted EBITDA ratio of 4.1 times, in line with the firm’s budget and below its target of approximately 4.5 times.
The company declared a cash dividend of $0.2825 per share for the second quarter ($1.13 annualized), a 2% increase over 2Q22. The dividend is unchanged from the first quarter.
See more: “U.S. LNG Export Capacity Continues to Grow, Benefitting Midstream“
Kinder Morgan (KMI) Continues Share Repurchases
KMI returned $203 million to shareholders in stock buybacks during the second quarter, as the company repurchased approximately 20 million shares at an average price of $16.61 per share. During the first half, the company returned $317 million to shareholders in stock buybacks.
KMI has $1.73 billion remaining in its buyback authorization. The firm said it takes an opportunistic rather than programmatic approach to stock buybacks. KMI will use balance sheet capacity for share repurchases if the price makes sense to repurchase.
KMI is a holding in the Alerian Energy Infrastructure ETF (ENFR), weighted 5% as of July 19, according to ALPS. ENFR tracks the Alerian Midstream Energy Select Index (AMEI), a composite of North American energy infrastructure companies. Investors can also access AMEI with the ALPS Alerian Energy Infrastructure Portfolio (ALEFX), which provides exposure in a VIT wrapper.
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