Kinder Morgan 2025 Q2 Earnings Strong Performance with Net Income Up 23.3%

Kinder Morgan (KMI) reported its fiscal 2025 Q2 earnings on July 18th, 2025. The company's performance exceeded market expectations, showcasing a remarkable 23% increase in net income compared to the previous year. Kinder Morgan also raised its guidance, projecting adjusted EBITDA growth of at least 5% for the year, driven by the Outrigger acquisition and other strategic initiatives. This guidance adjustment indicates a positive outlook for the remainder of 2025, with the company anticipating continued growth and strong financial results.

Revenue

Kinder Morgan reported a 13.3% increase in total revenue, reaching $3.99 billion in Q2 2025, compared to $3.52 billion in Q2 2024. The Natural Gas Pipelines segment contributed $2.54 billion, including $2.53 billion from external customers and $5 million from intersegment revenues. The Products Pipelines segment added $691 million, while the Terminals segment generated $533 million, with $531 million sourced from external customers and $2 million from intersegment revenues. The CO2 segment reported revenue of $290 million, with $289 million from external customers and $1 million from intersegment revenues. Corporate and Eliminations accounted for a negative $8 million, bringing the total revenue to $4.04 billion.

Earnings/Net Income

Kinder Morgan's earnings per share (EPS) increased by 23.1% to $0.32 in Q2 2025, compared to $0.26 in Q2 2024, indicating strong earnings growth. The company's net income also rose significantly by 23.3% to $742 million, up from $602 million in the previous year. This performance reflects robust financial health and efficient operations.

Price Action

The stock price of Kinder Morgan edged up 0.90% during the latest trading day, 0.14% over the most recent full trading week, and 0.80% month-to-date.

Post-Earnings Price Action Review

The strategy of acquiring Kinder Morgan shares following revenue growth and retaining them for 30 days has historically delivered substantial returns, surpassing the benchmark by 12.23% over the past three years. This investment approach achieved a compound annual growth rate (CAGR) of 14.69%, demonstrating its effective performance in both returns and risk management, as evidenced by a maximum drawdown of 0.00%. The strategy appeals to investors seeking stability and consistent returns. Its strong track record suggests that Kinder Morgan's post-earnings performance could be a reliable indicator for future investments, provided the company continues its positive financial trajectory and strategic growth initiatives.

CEO Commentary

Kimberly Allen Dang, CEO & Director, expressed that Kinder Morgan's financial results demonstrate strong growth, with adjusted EBITDA increasing by 6% and adjusted EPS rising by 12% compared to the previous year. She emphasized the significant opportunities in the natural gas industry, highlighting an expected 20% growth in U.S. natural gas demand by 2030. Dang noted improvements in the federal permitting environment and anticipated significant cash tax benefits due to recent tax reforms. She acknowledged challenges from tariffs but maintained a positive outlook on project profitability, underscoring the company’s commitment to investing in stable fee-based assets and returning value to shareholders.

Guidance

Kinder Morgan expects to exceed its original budget for 2025, driven by contributions from the Outrigger acquisition and a projected adjusted EBITDA growth of 5% compared to 2024. The company anticipates adjusted EPS growth of approximately 10% for the year. It plans to invest around $500 million in capital expenditures for projects, with an expectation of substantial cash tax benefits starting in 2026 and continuing into 2027, while not anticipating being a material cash taxpayer until 2028.

Additional News

Kinder Morgan recently announced an expansion in its natural gas infrastructure projects, planning to invest over $500 million in its KinderHawk gathering system to support projected production growth from the Haynesville Basin. The expansion aims to meet increasing LNG capacity demands along the Gulf Coast. Additionally, the Trident Intrastate Pipeline project has been expanded to a capacity of 2.0 Bcf/d, expected to be completed by the first quarter of 2027. Moody's revised Kinder Morgan's rating outlook to positive, acknowledging the company's continued earnings growth and favorable leverage levels.