Kinder Morgan, Inc. KMI reported second-quarter 2026 adjusted earnings of 37 cents per share, beating the Zacks Consensus Estimate of 31 cents by 19.35%. Earnings increased 32.1% from 28 cents in the year-ago quarter.
Revenues increased 10.8% year over year to $4.48 billion from the prior year’s figure of $4.04 billion. Revenues surpassed the consensus estimate of $4.29 billion by 4.43%.
Strong quarterly results benefited from broad-based segment growth, led by higher natural gas transportation and gathering volumes. Natural gas transport volumes rose 7%, while gathering volumes increased 26%.
Kinder Morgan, Inc. Price, Consensus and EPS Surprise
Kinder Morgan, Inc. price-consensus-eps-surprise-chart | Kinder Morgan, Inc. Quote
KMI's Natural Gas Business Leads Growth
Natural Gas Pipelines adjusted segment earnings before depreciation, depletion and amortization (EBDA) expenses increased to $1.46 billion from $1.35 billion a year earlier. Higher contributions from the Texas Intrastate system and gathering assets supported the improvement.
Transportation volumes averaged 47,886 billion British thermal unit per day (BBtu/d) compared with 44,818 BBtu/d in the prior-year quarter. Growth reflected higher LNG deliveries on the Tennessee Gas Pipeline, stronger Texas Intrastate demand, higher export volumes to Mexico and increased power-generation demand in Arizona.
Gathering volumes advanced to 4,637 BBtu/d from 3,692 BBtu/d. KinderHawk volumes rose 54%, supported by increased Haynesville activity. Management noted that the system is effectively full and is adding 1 billion cubic feet per day of treating capacity.
Kinder Morgan's Other Segments Advance
Products Pipelines adjusted segment EBDA increased to $339 million from $289 million. Higher commodity prices and stronger butane blending volumes and rates more than offset weaker transportation activity.
Due to a temporary disruption of the West Coast supply and higher commodity prices, total refined product volumes declined 5% to 1.62 million barrels per day (MMBbl/d) from the year-ago figure of 1.71 MMBbl/d. Crude and condensate volumes fell 16% to 421,000 barrels per day (Bbl/d), largely because the Double H system was converted from crude oil to natural gas liquids service.
Terminals adjusted segment EBDA rose to $309 million from $300 million. Higher liquids terminal rates, ancillary fees and favorable commodity pricing supported results. Liquids utilization was 93%, while the Jones Act tanker fleet remained fully contracted for 2026.
CO2 adjusted segment EBDA increased to $207 million from $145 million. Total net oil production increased 10% to 28,040 Bbl/d, driven by a 15% rise in SACROC production. The realized weighted average oil price increased to $73.78 per barrel from $67.60, while the realized weighted average NGL price was $33.38 per barrel, higher than the $32.08 per barrel recorded a year earlier.
KMI's Cost Profile Supports Profit Growth
Total operating costs, expenses and other expenditures increased 8.3% year over year to $3.13 billion. Costs of sales rose to $1.41 billion from $1.21 billion, while operations and maintenance expenses increased to $806 million from $773 million.
Operating income increased 16.8% to $1.35 billion. The operating margin expanded to 30.1% from 28.5%, reflecting revenue growth that outpaced increases in operating expenses.
Adjusted EBITDA reached a second-quarter record of $2.20 billion, up 12% year over year. Net income attributable to KMI increased 21% to $867 million, while reported earnings rose to 39 cents per share from 32 cents.
Kinder Morgan Expands Project Pipeline
The project backlog stood at $9.6 billion at the end of the quarter, down from $10.1 billion sequentially after approximately $660 million of expansion projects entered service. Natural gas projects represented about 92% of the backlog.
The board also granted contingent approval to nearly $400 million of projects that will enter the backlog after contract execution. Management expects to sanction significant additional projects from an opportunity set exceeding $10 billion during the second half of 2026.
Kinder Morgan's Cash Flow & Balance Sheet
Cash flow from operations was $1.96 billion in the quarter. Meanwhile, free cash flow was $978 million and free cash flow after dividends reached $313 million.
As of June 30, 2026, KMI reported $89 million in cash and cash equivalents. Net debt stood at $32.03 billion at quarter-end. The net debt-to-adjusted EBITDA ratio improved to 3.6X from 3.8X at the end of 2025.
KMI Raises 2026 Outlook
Kinder Morgan expects full-year adjusted earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) to exceed its original $8.6 billion budget by more than 5%. The company also expects adjusted earnings to surpass its initial $1.36-per-share budget by more than 12%.
The revised guidance reflects strong first-half performance across all business segments.
KMI’s Dividend Growth
The quarterly dividend was raised 2% to 29.75 cents per share, equivalent to $1.19 per share annually. The dividend is payable Aug. 17, 2026, to shareholders of record as of Aug. 3.
KMI’s Zacks Rank & Stocks to Consider
Kinder Morgan currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector that have yet to release their second-quarter 2026 earnings are Cheniere Energy, Inc. LNG, Venture Global, Inc. VG and NOV Inc. NOV. LNG sports a Zacks Rank #1 (Strong Buy), while NOV and VG carry a Zacks Rank #2 (Buy) each, at present. You can see the complete list of today’s Zacks Rank #1 stocks here.
Houston, TX-based Cheniere Energy is primarily engaged in the liquefied natural gas business. LNG owns and operates major liquefaction and export facilities on the U.S. Gulf Coast, including the Sabine Pass and Corpus Christi terminals.The company is involved in liquefied natural gas and natural gas marketing. With growing demand for cleaner energy, LNG is well-positioned to meet this need through its liquefaction and export facilities. Cheniere Energy is scheduled to release second-quarter 2026 earnings on Aug. 6, 2026.
Venture Global is one of the largest cost-efficient liquefied natural gas exporters in the United States, operating major production facilities along the U.S. Gulf Coast. VG distinguishes itself through a highly efficient, modular construction approach, which enables faster project delivery and massive volumes of reliable natural gas. This innovative strategy allows the company to rapidly scale and meet the world's rising demand for cleaner energy. Venture Global is scheduled to release second-quarter 2026 earnings on Aug. 11, 2026.
Houston, TX-based NOV is a global leader in the design, manufacture and sale of advanced equipment and components used in the oil and gas drilling, production, and renewable energy sectors. By leveraging its extensive proprietary technology portfolio, the company is well-positioned to reduce marginal costs and capitalize on the growing demand for oil and gas in the coming years. NOV is scheduled to release second-quarter 2026 earnings on July 28, 2026.
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