Cash Pipeline Still Flows at Kinder Morgan (KMP, SRE, COP)

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By Douglas A. McIntyre Updated Published
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Money_stack_pic_2Kinder Morgan Energy Partners L.P. (NYSE:KMP) reported earnings yesterday, and handily missed analysts expectations of $3.4 billion in revenue and earnings per limited partner unit of $0.53. Revenue for the fourth quarter totaled nearly $2.3 billion and earnings per unit came in at $0.26. Still, the stock rose about $2/unit before closing the day at $48.49/unit. The quarterly distribution to limited partners will amount to $1.05/common unit.

The number that really matters to Kinder Morgan is its income fromcontinuing operations before taxes. For the fourth quarter, thisamounted to $262.6 million, up from $175.1 million a year ago. For theyear, income from continuing operations totaled $1.34 billion, upnearly 3x from last year’s $487.4.

The big hike in income is the result of the opening of the first phaseof the Rockies Express (REX) natural gas pipeline. REX is a jointventure with Sempra Energy Inc. (NYSE:SRE) and ConocoPhillipsCorporation (NYSE:COP) that will be completed in April 2009 and haul1.8 billion cubic feet of natural gas every day from Cheyenne, Wyoming,to the eastern border of Ohio. The final cost for REX will reach $6.2billion, but according to Kinder Morgan the line is fully subscribedunder long-term contracts.

The unit price is rising again this morning, up to $48.95. The 52-week high is $60.89.

Paul Ausick
January 23, 2009

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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