Kinder Morgan reported worse-than-expected fourth-quarter earnings and revenue after the market closed Wednesday, offering investors a check-in on the fast-moving pipeline industry stocks. Kinder Morgan stock edged lower Thursday, but is still near record highs.
The gas pipeline giant saw Q4 EPS grow 14% to 32 cents with sales totaling $3.99 billion, down 1% compared to a year ago. For the full year, Kinder Morgan profit came in $1.15 per share, up 7.4% vs. 2023, with revenue declining 1% to $15.1 billion.
Prior to Wednesday's release, analysts expected Q4 earnings of 34 cents with sales of $4.18 billion. After nearly two years of spotty results, analysts see performance stabilizing in 2025.
Kinder Morgan Sees AI, Crypto-Fueled Backlog Boom
"For several quarters now, we have pointed to expected significant new natural gas demand for LNG, power plants, and emerging opportunities such as artificial intelligence operations, cryptocurrency mining, data centers and industrial re-shoring. These expectations are being realized," Chief Executive Officer Kim Dang said in the earnings release Wednesday.
"Our project backlog also reflects this strong natural gas demand. At the end of the fourth quarter of 2024, the backlog stood at $8.1 billion, a nearly 60% increase compared to $5.1 billion in the third quarter of 2024. Natural gas projects account for approximately 89% of the backlog," Dang added.
For 2025, Kinder Morgan expects adjusted EPS of $1.27, up 10% from 2024, and plans to declare a dividend of $1.17 per share for 2025, a 2% increase from 2024.
As demand for natural gas rises to meet energy needs not covered by renewables, the value of Kinder Morgan's infrastructure has become even more valuable. That established network allows Kinder Morgan to pay steady distributions. The company will give its full annual outlook in February.
Kinder Morgan, headquartered in Houston, operates nearly 50,000 miles of pipelines and 139 storage terminals across the U.S. While the company's network transports a variety of products, it is primarily focused on natural gas, with 40% of the U.S. natural gas passing through its system at some point.
Oil And Gas Prices
KMI stock fell 1% to 30.44 during market action on Thursday after a 1.4% drop to 30.79 on Wednesday.
The stock is up around 13% in January and is slightly extended after breaking out above a 28.81 buy point from a flat base last week, according to MarketSurge chart analysis. Kinder Morgan stock generated an impressive 55% advance last year.
U.S. oil prices along with U.S. natural gas prices are also moving higher to begin 2025. West Texas Intermediate oil futures traded above $75 per barrel on Thursday. Natural gas prices advanced above $4 per million British thermal units on Thursday after jumping about 5% on Wednesday.
Oil field services titan Halliburton fell 3.2% Wednesday after reporting slightly better than expected Q4 earnings but revenue came in below analyst expectations.
"While we expect 2025 to be sequentially softer in North America, we begin the second half of this decade in a great position, with a transformed balance sheet, leading returns, and strong free cash flow," Halliburton Chief Executive Jeff Miller said in the earnings release Wednesday.
Meanwhile, SLB, formerly Schlumberger, on Friday reported slightly better-than-expected fourth-quarter earnings and revenue, while increasing its quarterly dividend. The oil field services giant saw Q4 EPS grow 7% to 92 cents with sales increasing 3% to $9.28 billion.
Oil and gas pipeline stocks are also broadly beginning to show signs of strength. The 47 stocks in the IBD-tracked Oil & Gas-Transport/Pipeline industry group have collectively gained nearly 10% this month.
Kinder Morgan stock has an 86 Composite Rating out of a best-possible 99. The stock also has a 93 Relative Strength Rating and a 55 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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