What You Missed in Kinder Morgan Inc's Quarterly Report
Natural gas pipeline giant Kinder Morgan (NYSE: KMI) surprised the market when it unveiled its new way forward along with reporting second-quarter results after the market closed on Wednesday. Given the stock's 5% pop by midday Thursday, it's clear that investors were thrilled to see that the company intends on increasing the dividend 60% next year and by another 25% annually in 2019 and 2020. They also loved the fact that the company plans to buy back $2 billion of its shares, which amounts to as much as 5% of its outstanding stock given how embarrassingly cheap it is these days even after the post-earnings pop. That said, because all the focus was on the future increase in cash heading back to shareholders, it's likely that you missed some important things in that report. Here are three that you won't want to overlook.
One of the reasons Kinder Morgan can start sending more cash to investors next year is due to the overall stability of the cash flow its assets generate. That operational strength was on full display during the second quarter. CEO Steve Kean noted this in the company's earnings release by saying that "Our operational performance was once again resilient, putting us slightly ahead of guidance for the quarter." That's a repeat performance from the first three months when the company also came in slightly ahead of its budget. It is worth noting that the pipeline giant still expects to end the year right on budget due to the timing of some sustaining capital expenses, which positively impacted results during the first half of the year but will have the opposite effect on the back half of the year.
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Source: Fool.com
