Pipeline giant posts a profit in a sign of an industry rebound
Houston pipeline giant Kinder Morgan kicked off earnings season for energy companies Wednesday, swinging to a profit from a steep loss a year earlier.
While the $170 million earned by Kinder Morgan in the fourth quarter fell short of Wall Street expectations, it was a sign that an industry recovery is slowly taking shape after several quarters of dire earnings and red ink reported by a wide range of energy companies. It was also far better than the third quarter of 2016, when the company lost $227 million, and the fourth quarter of 2015, when the company lost $72 million.
The company’s quarterly revenue still slipped 7 percent to $3.39 billion, compared with $3.64 billion during the last quarter of 2015, showing that the energy rebound isn’t in full swing by any means after a two-year bust.
Executive chairman and co-founder Rich Kinder emphasized that the company has tightened its budgeting and will reward investors more in due time. Kinder Morgan took a big hit on Wall Street at the end of 2015 when it decided to slash its dividend payments to shareholders by 75 percent in order to cut costs and better survive during the downturn.
In October, the company said it would maintain its reduced dividend of 12.5 cents per share each quarter, from 51 cents as recently as 2015. Kinder on Wednesday reiterated plans to “substantially” drive that dividend back up in 2018.