‘Less defense, more offense’ to come in Kinder Morgan earnings

(David Paul Morris/Bloomberg)

The Houston pipeline giant Kinder Morgan reports earnings on Wednesday, kicking off the first quarter reporting season for the energy sector.

Kinder’s results should open another window into the industry’s nascent recovery following the crude price crash two years ago. Analysts expect management to detail rebounding volumes for its Hiland natural gas lines in North Dakota and KinderHawk systems in the Haynesville and Bossier Shale areas of northwest Louisiana, according to the Houston energy investment bank Tudor, Pickering, Holt & Co.

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They also think executives could highlight a list of growth opportunities for the company, including at the El Paso Natural Gas Co., a system of gas lines that stretch from the Rockies to California, the Natural Gas Pipeline Company of America, the largest transporter of natural gas into the high-demand Chicago market, and the Texas Intrastate Pipeline Group.

Kinder may also announce terms for a joint venture in the $7 billion expansion of the Trans Mountain pipeline in Canada, said analysts at the London financial services firm Barclays.

“We don’t think the focus of the call will be on the quarter’s results,” Barclays said, “but rather the implications of what the (joint venture) means for the balance sheet and the dividend.”

“We think investors under-appreciate the longer term potential of what all this could mean,” the analysts continued in a Tuesday note. “That the company could start playing less defense and more offense.”