Kinder Morgan Energy Partners LP (KMP), Wednesday reported a rise in profit for the second quarter, primarily on higher revenues, as well as earnings in equity investments. Quarterly earnings and revenues, however, came in short of analysts' estimates. The company also increased its quarterly cash distribution by 4% year-over-year.
Second-quarter net income attributable to the Houston, Texas-based company was $361.2 million, up from $323.8 million in the same quarter last year. Limited Partners' interest in net income rose to $268.7 million from $91.0 million in the year-ago quarter. Limited Partners' net income per unit increased to $0.88 from $0.33 last year.
Limited Partners' net income before certain items increased to $106.1 million or $0.35 per unit from $93.0 million or $0.34 per unit in the previous year. Certain items totaled a net loss of $4.2 million, which was primarily attributable to environmental remediation costs associated with a former terminal property that is expected to be sold.
On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.39 per share. Analysts' estimates typically exclude special items.
Second quarter distributable cash flow before certain items was $322.3 million, up 18% from $274.2 million in the comparable quarter last year. Distributable cash flow per unit before certain items was $1.06, up 7% from $0.99 per unit for the second quarter of 2009.
Revenues for the second quarter were $1.96 billion, compared to $1.64 billion in the prior-year quarter. Seven analysts had consensus revenue estimate of $1.99 billion for the quarter.
Earnings from equity investments increased to $55.2 million from $41.9 million a year ago.
Chairman and CEO Richard Kinder said, "KMP had a strong second quarter and we are delighted to increase the cash distribution per unit for the second consecutive quarter. All five of KMP's business segments produced higher results than in the second quarter of 2009. Our businesses generated $810.6 million in total segment earnings before DD&A and certain items, up 14 percent from $710.6 million in the second quarter of 2009."
By segment, Products Pipelines business produced second quarter segment earnings before DD&A and certain items of $181.1 million, up 15% from $157.8 million for the comparable period in 2009. Segment revenues for the second quarter were up 13.4% attributable primarily to both indexed and certain cost of service pipeline rate filings as well as the revenue uplift from ethanol storage and blending in California.
Natural Gas Pipelines business produced second quarter segment earnings before DD&A and certain items of $185.1 million, up 12% from $164.6 million in the second quarter of 2009. Overall segment transport volumes were up 17%, compared to the second quarter last year, due primarily to MEP coming online.
Terminals business produced second quarter segment earnings before DD&A and certain items of $159.0 million, up 12% from $142.5 million for the comparable period in 2009. Bulk transload tonnage increased 27% to 25.2 million tons, compared to the second quarter of 2009, driven primarily by increased steel volumes.
Kinder Morgan Canada produced second quarter segment earnings before DD&A and certain items of $43.9 million versus $43.0 million in the second quarter of 2009. Segment growth reflects increased throughput on the Trans Mountain pipeline system driven by strong ship traffic at Port Metro Vancouver and the positive impact of the strengthening of the Canadian dollar.
During the quarter, the company completed an approximately $921 million acquisition of 50% of Petrohawk Energy's gathering and treating assets in the Haynesville Shale in Louisiana and forming a joint venture KinderHawk Field Services. Kinder Morgan also entered into a major contract with a producer in the Eagle Ford Shale in Texas with its joint venture partner Copano Energy.
For the six-month period, limited partners' interest in net income increased to $244.8 million or $0.81 per unit from $131.2 million or $0.48 per unit in the same period of the previous year. Revenues for the period increased to $4.09 billion from $3.43 billion last year.
The company also increased its quarterly cash distribution per common unit to $1.09, payable on August 13, 2010, to unitholders of record as of July 30, 2010. The distribution represents a 4% increase over the second quarter 2009 cash distribution per unit of $1.05.
Looking ahead, the company said it will meet its previously announced budget to pay cash distributions of $4.40 per unit for the four quarters of 2010, which would be a 4.8% increase over the $4.20 per unit distributed in 2009.
Among others in the industry, Houston, Texas-based Enterprise Products Partners L.P. (EPD) is slated to report its second quarter earnings on July 26. Analysts estimate earnings of $0.44 per share, on revenues of $7.99 billion for the quarter.
KMP closed Wednesday's regular trading at $68.92, down $0.08 or 0.12%, on a volume of 0.84 million shares on the NYSE. In after hours, the stock gained $0.17 or 0.25%, trading at $69.09. In the past 52-week period, the stock trended in a range between $51.56 and $69.33, with a 3-month average volume of 0.92 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.