BLBG:Kinder Morgan Quarterly Profit Rises on Gas Transport Boost
Kinder Morgan Energy Partners LP (KMP), the pipeline company whose parent is buying El Paso Corp. (EP) for $20.7 billion, said fourth-quarter profit rose 16 percent as it transported more natural gas.
Net income rose to $475 million, or 51 cents a unit, from $409 million, or 42 cents, a year earlier, the Houston-based company said in a statement today. Excluding certain legal and insurance expenses, asset sales and financial contracts, the company earned 6 cents less than the average of 15 analysts’ estimates compiled by Bloomberg.
Revenue rose 4 percent to $2 billion from $1.93 billion a year earlier. Kinder Morgan’s gas-pipeline business shipped 11 percent more compared with the same period in 2010 after a new line opened in the Fayetteville Shale field and the company acquired a gathering system in the Haynesville field, according to the statement. Shipments of gasoline and other refined products fell 2.6 percent.
Kinder Morgan will transport more gas this year as production increases in shale fields, Chairman and Chief Executive Officer Richard Kinder said on a conference call. The company will also benefit as demand rises for carbon dioxide in oilfields and exports of coal and refined products climb.
“This is the most diverse set of opportunities at any time in Kinder Morgan’s 15-year history,” he said. The company reiterated its forecast for an 8 percent increase in cash distributions this year, to $4.98 a unit from $4.61 last year.
‘Smaller Problems’
The fourth-quarter results will likely be overshadowed by the El Paso takeover, Brian Watson, director of research at SteelPath Advisors in Dallas, said in an interview before the earnings were announced.
The size of the deal makes the performance of individual units at Kinder Morgan “smaller problems,” said Watson, who helps manage about $2.2 billion.
The earnings were released after the close of regular trading on U.S. markets. Kinder Morgan fell 0.1 percent to $85.40 at 4:42 p.m. in New York.
Kinder Morgan’s parent, Kinder Morgan Inc., announced Oct. 16 it will buy El Paso for $20.7 billion in cash and stock. The deal would create the biggest U.S. gas pipeline network.
To contact the reporter on this story: Mike Lee in Dallas at mlee326@bloomberg.net
To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net
