What Triggered the Rally: Kinder Morgan Inc (NYSE: KMI) stock fell over 1.7% in the pre market session on January 17th, 2019 (Source: Google finance). Kinder Morgan sold the controversial Trans Mountain pipeline to the Canadian government in August for $4.5 billion and on Wednesday reiterated that it was looking at all options, including a sale, following that transaction. Kinder Morgan Inc., which holds about 70 per cent majority voting interest in Kinder Morgan Canada, has hired investment bank TD Securities to facilitate a potential sale of its Canadian business. KMI has reported fourth-quarter net income available to common stockholders of US$483 million, compared with a loss of US$1.05 billion a year earlier, due to the overhaul of the U.S. tax code.
Other Financials Overview: Pipeline segment earnings jumped 39 per cent to $13.5 million, led by the Canadian part of the Cochin pipeline, which transports light condensate from the United States to Fort Saskatchewan, Alberta.
KMI in the fourth quarter of FY 18 has reported the adjusted earnings per share of 25 cents, while adjusted revenue of $3.78 billion in the fourth quarter of FY 18. For the fourth quarter, transport volumes increased approximately 4.5 bcf a day on the transmission system, a 15% growth. Deliveries to LNG facilities were over a bcf in the quarter and that’s approximately 400 million cubic feet a day increase versus the fourth quarter of 2017. Power demand on the system for the quarter was up 300 million cubic feet a day and exports to Mexico on Kinder Morgan pipeline were up a little over 70 billion cubic feet per day.
KMI has paid off over $8 billion of debt and reduced our debt-to-EBITDA ratio into the targeted 4.5 level, and had the credit rating upgraded by both S&P by Moody’s. The company has raised the dividend for $0.50 in 2017 to $0.80 in 2018, and reiterated the intention to increase it to $1 in 2019 and to $1.25 in 2020. The company has bought back over $500 million worth of shares while the firm has funded the growth capital without leading to access external sources.