Key facts
- Kinder Morgan exceeded second-quarter profit estimates.
- Higher natural gas transport volumes were the primary driver of the earnings beat.
- Demand for natural gas was supported by strong LNG exports and increased electricity generation.
- The company's natural gas transport volumes increased year-over-year.
- Kinder Morgan has a significant project backlog focused on power generation and LNG infrastructure.
Kinder Morgan, a U.S. pipeline operator, exceeded Wall Street's second-quarter profit expectations, driven by increased natural gas volumes transported through its infrastructure. The company reported an adjusted profit of 37 cents per share, surpassing the analysts' estimate of 32 cents per share. This performance was bolstered by a significant rise in natural gas demand, attributed to record liquefied natural gas (LNG) exports and growing electricity consumption for AI operations, cryptocurrency mining, and data centers.
Kinder Morgan transported approximately 47,886 billion British thermal units (Btu) of natural gas per day during the quarter, a notable increase from 44,818 billion Btu per day in the same period last year. The company currently moves 8 billion cubic feet per day (Bcf/d) to LNG terminals and anticipates this figure to grow to 12 Bcf/d by 2028. Furthermore, Kinder Morgan is actively pursuing opportunities to supply the natural gas power generation sector, with over 5 Bcf/d in potential projects. Roughly half of the company's $9.3 billion project backlog is dedicated to power generation initiatives.
Total delivery volumes, which encompass refined products like jet fuel and diesel, also saw an increase of over 2%, reaching 2.21 million barrels per day. The company's net income for the second quarter was $715 million, or 32 cents per share, compared to $575 million, or 26 cents per share, in the previous year. Executive Chairman Richard Kinder expressed optimism about the company's future, citing strong natural gas demand forecasts, a favorable regulatory environment, and supportive federal permitting agencies. The company noted that while President Donald Trump's tariffs on imports may present some challenges, they are expected to impact only about 1% of existing project costs.