U.S. pipeline operator Kinder Morgan (NYSE: KMI) has revised down its earnings guidance for this year amid a decline in oil prices and oil product volumes.
The company reported late on Wednesday adjusted earnings per share (EPS) of $0.25 for the third quarter, flat compared to the third quarter of 2023, and slightly missing the average expectation of $0.27 EPS, according to estimates compiled by LSEG.
Citing lower-than-budgeted commodity prices and start-up delays on its renewable natural gas (RNG) facilities, Kinder Morgan revised down its profit expectations for the full-year of 2024.
During the third quarter of 2024, the U.S. benchmark oil price, WTI Crude, averaged 8.1% below the price in the same period of 2023, as concerns about global oil demand weighed down on international oil prices between July and September.
Due to lower-than-budgeted oil prices and start-up delays on RNG facilities, the pipeline giant now expects to be below budget on adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) by about 2%. Full-year adjusted EPS would be some 4% lower than initially expected, although both adjusted core earnings and earnings per share are set to increase compared to 2023.
In the products pipeline segment, refined products volumes were up 1% and crude and condensate volumes were down 4% in the third quarter compared to the third quarter of 2023, Kinder Morgan’s president Thomas Martin said on the earnings call.
For the full year 2024, the company expects refined products volumes to be slightly below the plan to 2% growth over 2023, Martin added.
Kinder Morgan noted huge opportunities in the natural gas business amid growing U.S. demand for electricity.
“Discussions around opportunities related to significant new natural gas demand for electric generation associated with coal conversions at power plants, artificial intelligence operations, cryptocurrency mining, data centers, and industrial re-shoring also continued during the quarter, and we now see an opportunity set well in excess of 5 Bcf/d in that area,” CEO Kim Dang said.
By Tsvetana Paraskova for Oilprice.com
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