Kinder Morgan (NYSE:KMI) Q3 2020 Earnings Preview

in EARNINGS/INVESTING IDEAS by

Kinder Morgan, Inc. (NYSE:KMI) is scheduled to report Q3 earnings results on October 21, 2020.

The company is expected to report earnings of $0.20/share on revenue of $2.942 billion. The consensus earnings per share (EPS) of $0.20/share is based on a poll of 11 analysts and represents a decline in eps of −9.9% over the same quarter last year, when the company reported earnings of $0.22/share.

The revenue forecast of $2.942 billion based on a poll of 11 analysts implies a year-over-year (YoY) decline in revenue of −8.5%. Last year the company reported $3.214 billion in revenue for the quarter.

Expected to report EPS contraction of −9.9% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $2,941.59 $3,214.00 −8.5%
EPS $0.20 $0.22 −9.9%

Earnings Call Trends

Historically, management has exceeded analyst expectations 2 out of the last 8 tracked quarters, missed 4 quarters, and met expectations 2 quarters.

What are your expectations from Kinder Morgan, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.16 $0.17 7.7% Beat
Q1, 2020 $0.25 $0.24 −3.6% Missed
Q4, 2019 $0.27 $0.26 −2.4% Missed
Q3, 2019 $0.24 $0.22 −9.5% Missed
Q2, 2019 $0.24 $0.22 −6.8% Missed
Q1, 2019 $0.25 $0.25 0.7% Beat
Q4, 2018 $0.25 $0.25 −1.0% Missed
Q3, 2018 $0.21 $0.21 −0.2% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −4.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 22, 2020 $15.09 $14.49 −4.0% Decline
April 22, 2020 $14.46 $14.21 −1.7% Decline
January 22, 2020 $20.93 $21.76 4.0% Increase
October 16, 2019 $20.18 $20.07 −0.5% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.02, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.02 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Kinder Morgan, Inc. is currently trading at $12.88/share, up 0.1% for the day. The company is trading at approximately 56.9% of its 52-week high of $22.58/share. The company’s stock price is down −11.1% since the last earnings report and up 0.7% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 48.49 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:KMI Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 181.01 and a forward P/E multiple of 15.05.

Kinder Morgan, Inc.’s current share price also implies a price-to-book (P/B) multiple of 0.92. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $12.88
P/E Ratio 181.0x
P/E Ratio (Fwd) 15.1x
PEG Ratio −2.0
Total Debt / Total Capital 53.1%
Levered Free Cash Flow $2.748 billion
EV / EBITDA 9.3x

Finbox

Kinder Morgan, Inc. is a large-cap stock with a market capitalization of $29.109 billion and a total enterprise value of $64.059 billion. The company operates in the Energy sector and the Oil, Gas & Consumable Fuels industry.

Kinder Morgan, Inc. operates as an energy infrastructure company in North America. The company operates through Natural Gas Pipelines, Products Pipelines, Terminals, and CO2 segments. The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipeline and storage systems; natural gas gathering systems and natural gas processing and treating facilities; natural gas liquids fractionation facilities and transportation systems; and liquefied natural gas liquefaction and storage facilities. The Products Pipelines segment owns and operates refined petroleum products, and crude oil and condensate pipelines; and associated product terminals and petroleum pipeline transmix facilities. The Terminals segment owns and/or operates liquids and bulk terminals that stores and handles various commodities, including gasoline, diesel fuel, chemicals, ethanol, metals, and petroleum coke; and owns tankers. The CO2 segment produces, transports, and markets CO2 to recovery and production crude oil from mature oil fields; and owns interests in/or operates oil fields and gasoline processing plants, as well as operates a crude oil pipeline system in West Texas. It owns and operates approximately 83,000 miles of pipelines and 147 terminals. The company was formerly known as Kinder Morgan Holdco LLC and changed its name to Kinder Morgan, Inc. in February 2011. Kinder Morgan, Inc. was founded in 1936 and is headquartered in Houston, Texas.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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