Kinder Morgan Inc (NYSE:KMI) stock rose 0.35% (As on October 19, 11:32:31 AM UTC-4, Source: Google Finance) after the company posted lower-than-expected profit for the third quarter, as higher interest expenses offset strength in its natural gas and products pipeline segment. The company projects backlog at the end of the third quarter was $3.8 billion, up from $3.7 billion in the second quarter. In calculating backlog Project EBITDA multiples, the company exclude both the capital and EBITDA from the CO₂ business segment and the gathering and processing projects, where the earnings are more uneven than with the other business segments. To compensate for that the company require higher return thresholds for those projects. The company expect the remaining $2.7 billion of projects in the backlog to generate an average Project EBITDA multiple of approximately 4.7 times. The company continued strong emphasis on the base business, the company is also devoting roughly 84% of our project backlog to lower-carbon energy investments, versus 80% in the second quarter, including natural gas as a substitute for higher emitting fuels, producer certified natural gas, renewable natural gas (RNG), renewable diesel (RD), and feedstocks associated with RD and sustainable aviation fuel.

KMI in the third quarter of FY 23 has reported the adjusted earnings per share of 25 cents, missing the analysts’ estimates for the adjusted earnings per share of 26 cents, according to LSEG data. The company had reported the adjusted revenue of $3.91 billion in the third quarter of FY 23, missing the analysts’ estimates for revenue of $4.64 billion.

For 2023, KMI budgeted net income attributable to KMI of $2.5 billion ($1.12 per share) and dividends of $1.13 per share, a 2% increase from the dividends declared for 2022. The company also budgeted 2023 DCF of $4.8 billion ($2.13 per share), Adjusted EBITDA of $7.7 billion and to end 2023 with a Net Debt-to-Adjusted EBITDA ratio of 4.0 times, well below the long-term target of 4.5 times.

The company expects to finish 2023 slightly below the plan on a full-year basis, due to lower than expected commodity prices, delayed RNG projects and higher pipeline integrity expense. So far, crude oil and natural gas prices have been below the full year 2023 budget assumptions of $85 per barrel and $5.50 per MMBtu, respectively, and the natural gas liquids (NGL) to crude ratio has been below the CO₂ segment’s budgeted ratio of 45%.