What caused KNTK's Q4 2024 EPS to underperform forecasts?

Kinetik Holdings Inc. (KNTK) experienced a shortfall in its fourth-quarter (Q4) 2024 earnings per share (EPS), primarily due to operational and market-related factors:

1. **Oil and Gas Field Services Performance**: Kinetik's EPS was negatively impacted by the Durango acquisition, which increased operating expenses to $55.8 million from $42.9 million in the prior year. This rise was primarily attributed to costs associated with the Durango acquisition.
2. **Market Conditions and Investor Sentiment**: The volatility in the U.S. stock market, driven by factors such as recession concerns, geopolitical tensions, and uncertainty around upcoming elections, likely influenced investor confidence and sector preferences. This might have led to a reassessment of risk and a shift in investment priorities, affecting Kinetik's stock performance and, subsequently, its EPS.
3. **Interest Rate Environment**: The impact of interest rate cuts by the Federal Reserve, which can affect borrowing costs and capital expenditures in the oil and gas sector, might have influenced Kinetik's financial outcomes. Lower interest rates can reduce the cost of debt, which is beneficial for companies with high debt levels, but Kinetik's increased interest expense due to losses on interest rate swaps could have had a negative effect on its net income and, consequently, its EPS.

In summary, Kinetik's Q4 2024 EPS underperformance can be attributed to a combination of operational costs associated with recent acquisitions and market conditions influencing investor sentiment and sector performance.

|code|Ticker|Name|Date|EPS Surprise|Diluted EPS|market_code|
|---|---|---|---|---|---|---|
|KNTK|KNTK.N|Kinetik Holdings|2024 Q1|-0.31|0.12|169|
|KNTK|KNTK.N|Kinetik Holdings|2024 Q2|0.06|0.54|169|
|KNTK|KNTK.N|Kinetik Holdings|2024 Q3|-0.1|0.35|169|
|KNTK|KNTK.N|Kinetik Holdings|2024 Q4|-0.36||169|