By Tess Stynes
Kinder Morgan Inc.'s first-quarter earnings fell 1.7% as its
Kinder Morgan Energy Partners L.P. affiliate and El Paso Pipeline
Partners L.P. also posted declines.
The year-earlier period included a big investment-sale gain at
Kinder Morgan Energy Partners, which posted a profit decline of
4.7% for the quarter. Affiliate El Paso Pipeline Partners' earnings
eased 0.6%.
Kinder Morgan raised its quarterly dividend to 42 cents a share,
up from its previous dividend of 38 cents a share.
Kinder Morgan Energy Partners, which holds the majority of
Kinder Morgan's assets, had reported strong profit growth in recent
quarters. Earnings more than doubled in 2013, while Kinder Morgan
had a sixfold increase in net income last year.
Kinder Morgan Energy, which transports natural gas and coal, has
benefited from strong production at U.S. alternative shale fields.
The company has projected spending of roughly $3.6 billion on
expansion projects and small acquisitions for 2014.
Kinder Morgan Inc. Chief Executive Richard D. Kinder said in a
statement that the companies now have identified a combined $16.4
billion in expansion and joint-venture investments. Mr. Kinder
noted that $14.9 billion in expansion and joint-venture investments
have been identified at Kinder Morgan Energy Partners, an increase
from the previous backlog of $13.5 billion in projects announced in
January. Meanwhile, El Paso Pipeline has more than $1.5 billion of
expansion projects under contract with customers.
Kinder Morgan Inc. reported a profit of $287 million, down from
$292 million a year earlier. On a per-share basis, earnings were
flat at 28 cents on fewer shares outstanding. Revenue increased 32%
to $4.05 billion.
Analysts polled by Thomson Reuters most recently projected
earnings of 33 cents on revenue of $3.87 billion.
Kinder Morgan Energy reported a profit of $746 million, down
from $783 million a year earlier. On a per-unit basis, which
reflects general partner interests, adjusted earnings fell to 67
cents from 97 cents. Excluding the prior-year investment-asset-sale
gains other items, adjusted earnings increased to 73 cents from 66
cents. Revenue climbed 37% to $3.65 billion.
Analysts polled by Thomson Reuters most recently projected
earnings of 73 cents on revenue of $3.41 billion.
The natural-gas pipeline business reported adjusted segment
earnings climbed 46% to $723 million, driven by asset dropdowns
related to the El Paso acquisition and contributions from its
Copano Energy acquisition.
Mr. Kinder said the natural-gas pipeline business "benefited
from continued strong demand for its services, driven by ongoing
growth in the Marcellus and Utica shale plays and a number of
expansion projects that began service in November."
The natural-gas pipeline business also recorded volume
"continuously near capacity on many of our natural-gas pipelines
and record storage withdrawals" as the result of cold winter
weather in the quarter, Mr. Kinder noted.
El Paso Pipeline Partners reported a profit of $173 million,
down from $174 million. On a per-unit basis, which reflects the
general partner interests, earnings fell to 54 cents from 58 cents.
Revenue dropped 1% to $382 million.
Analysts polled by Thomson Reuters most recently projected
earnings of 51 cents on revenue of $405 million.
Kinder Morgan Inc. acquired El Paso Corp. in a roughly $21
billion deal in May 2012 that created the largest natural-gas
pipeline operator in North America.
Write to Tess Stynes at tess.stynes@wsj.com
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