Kinder Morgan 2025 Q2 Earnings Beats Expectations with 23% Net Income Growth

Kinder Morgan (KMI) reported its fiscal 2025 Q2 earnings on July 16th, 2025. The company's performance exceeded market expectations with a notable 23% increase in net income compared to the previous year. Kinder Morgan's adjusted EPS guidance was affirmed at $1.27 per share for 2025, consistent with analyst estimates. Additionally, Kinder Morgan anticipates surpassing its original budget for the year, driven by contributions from the Outrigger acquisition. The company projects significant cash tax benefits starting in 2026 and plans to remain a non-material cash taxpayer until 2028.

Revenue

The total revenue of Kinder Morgan increased by 13.2% to $4.04 billion in 2025 Q2, up from $3.57 billion in 2024 Q2.

Earnings/Net Income

Kinder Morgan's EPS rose 23.1% to $0.32 in 2025 Q2 from $0.26 in 2024 Q2, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $742 million in 2025 Q2, marking 23.3% growth from $602 million in 2024 Q2. The EPS improvement reflects robust financial health.

Post-Earnings Price Action Review

The strategy of buying Kinder Morgan shares after a revenue increase and holding for 30 days delivered moderate returns but lagged behind the market. With a compound annual growth rate of 10.29%, it trailed the benchmark by 21.63%. Despite a maximum drawdown of 0.00% and a Sharpe ratio of 0.41, the strategy carried minimal risk but offered conservative returns, making it suitable for investors seeking stability. The limited risk profile may appeal to those prioritizing financial security over aggressive growth, although it may not meet the expectations of more ambitious investors seeking higher returns.

CEO Commentary

Kimberly Allen Dang - CEO & Director emphasized strong financial growth, with adjusted EBITDA increasing by 6% and adjusted EPS rising by 12%. She highlighted that U.S. natural gas demand is expected to grow by 20% by 2030, driven by improved market fundamentals and a favorable federal permitting environment. Dang noted that tariffs have a minimal impact on project economics, estimating their effect on large projects to be around 1% of costs. The company’s project backlog increased to $9.3 billion, driven by long-term contracts and attractive returns, reflecting a confident outlook on future investments and growth opportunities in natural gas infrastructure.

Guidance

Kinder Morgan expects to exceed its original budget for 2025, anticipating adjusted EBITDA growth of at least 5% due to contributions from the Outrigger acquisition. The company guides for a dividend of $0.2925 per share, resulting in an annualized amount of $1.17 per share. Additionally, net income for Q2 2025 reached $742 million, and EPS was reported at $0.32. The company projects significant cash tax benefits starting in 2026 and 2027, with expectations to remain a non-material cash taxpayer until 2028.

Additional News

Kinder Morgan recently announced a significant expansion in its natural gas infrastructure projects. The company plans to invest more than $500 million in its KinderHawk gathering system to support projected production growth from the Haynesville Basin, addressing increasing LNG capacity demands along the Gulf Coast. Additionally, the expansion of the Trident Intrastate Pipeline project, which has increased its capacity to 2.0 Bcf/d, is expected to be completed by the first quarter of 2027. Furthermore, Moody's revised Kinder Morgan's rating outlook to positive, acknowledging the company's continued earnings growth, conservative funding strategies, and favorable leverage levels.