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Kinder Morgan (NYSE:KMI) -1.1% post-market Wednesday as Q3 revenues missed analyst expectations, offsetting better than expected distributable cash flow per share.
Q3 adjusted EBITDA rose 3.5% Y/Y to $1.84B, just shy of $1.86B analyst consensus estimate, revenues slid 25% to $3.91B and came in well short of $4.39B consensus, but DCF was $0.49/share, flat compared with the year-earlier quarter and a penny ahead of Wall Street consensus.
Kinder Morgan (KMI) said it ended Q3 with a net debt-to-adjusted EBITDA ratio of 4.1x, in line with the budget and well below its long-term target of ~4.5x.
Project backlog at the end of Q3 rose to $3.8B from $3.7B at the end of Q2; the company said it is devoting 84% of project backlog to lower-carbon energy investments, vs. 80% in Q2, including natural gas as a substitute for higher emitting fuels.
“We expect to finish 2023 slightly below our plan on a full-year basis, due to lower-than-expected commodity prices, delayed [renewable natural gas] projects and higher pipeline integrity expense,” the company said. “So far, crude oil and natural gas prices have been below our full year 2023 budget assumptions [but] we continue to see strong performance in our overall business partially offsetting these headwinds.”
A lower contribution from the CO2 transportation segment also pressured Q3 results, hurt by weaker prices of natural gas liquids and CO2, lower volumes and higher power costs.
However, CEO Kimberly Allen Dang said in a post-earnings call that “the 2024 curve is above 2023,” with a “lot of tailwinds coming in this business.”
