By Tess Stynes
Kinder Morgan Inc. (KMI) swung to a second-quarter profit as
earnings surged at its Kinder Morgan Energy Partners LP (KMP)
affiliate and El Paso Pipeline Partners LP's (EPB) bottom line
increased by 35% .
Kinder Morgan Inc. last May acquired El Paso Corp. in a roughly
$21 billion deal that created the largest natural-gas pipeline
operator in North America.
Kinder Morgan Energy, which transports natural gas and coal, has
benefited from strong production at U.S. alternative shale
fields.
Kinder Morgan Inc. Chief Executive Richard D. Kinder said
drivers of growth at Kinder Morgan Partners included asset drop
downs associated with the El Paso acquisition, contributions its
recent Copano Energy LLC acquisition, and strong oil production in
its carbon-dioxide segment.
"We see exceptional growth opportunities across all of our
business segments, as there is a need to build additional midstream
infrastructure to move or store oil, gas and liquids from the
prolific shale plays in the United States and the oilsands in
Alberta, along with increasing demand for [carbon dioxide], which
is used for enhanced oil recovery," Mr. Kinder added.
Kinder Morgan Inc. reported a profit of $277 million, or 27
cents a share, compared with a year-earlier loss of $126 million,
or 15 cents a share. Revenue climbed 56% to $3.38 billion. Analysts
polled by Thomson Reuters most recently projected per-share
earnings of 33 cents on revenue of $3.14 billion.
Kinder Morgan Energy reported a profit of $1 billion, up sharply
from $132 million a year earlier. On a per-unit basis, which
reflects general partner interests, adjusted earnings were $1.41,
compared with a year earlier loss of 53 cents. Excluding fair-value
impacts and other items, adjusted earnings were up at 47 cents from
37 cents a year earlier. Revenue surged 50% to $3.38 billion.
Analysts recently expected per-share profit of 60 cents on revenue
of $2.69 billion.
Kinder Morgan Energy's natural-gas pipeline business reported
adjusted segment earnings more than doubled to $566 million.
However, overall segment transport volumes fell 5% largely because
of significantly lower power plant gas demand.
El Paso Pipeline Partners reported a profit of $136 million, up
from $101 million. On a per-unit basis, which reflects the general
partner interests, earnings fell to 40 cents from 44 cents.
Excluding items such as asset dropdowns and write-downs, per-unit
earnings were down 43 cents from 46 cents. Revenue dropped 2.2% to
$359 million.
Analysts recently forecast per-share earnings of 47 cents on
revenue of $390 million.
Operations and management expenses dropped 37%.
Kinder Morgan Inc.'s shares were flat at $39.58 in recent
after-hours trading, while Kinder Morgan Energy's units were down
53 cents at $86.20 and El Paso Pipeline Partners' units increased
12 cents to $43.30.
Write to Tess Stynes at Tess.Stynes@dowjones.com
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