Report Date: Wednesday, July 22, 2026, after market close, with call/webcast to follow (per usual cadence, likely afternoon of July 23)
KMI shares have had a solid run into earnings, and expectations are elevated after a blowout first quarter. The stock is up meaningfully year-to-date, moving from roughly $27.71 in early January to the low-$32s heading into the report, with the shares recently trading around $32.30-$32.60. Sell-side sentiment is mixed-to-modestly positive: some trackers show a "Buy" consensus with an average target near $35, while others (e.g., a recent Seeking Alpha piece) frame the stock as a "hold" given "upside appears limited despite strong operational performance and a $10B project backlog."
Consensus for Q2 2026: - Adjusted EPS: $0.31, up ~10.7% from $0.28 in Q2 2025 - Revenue: roughly $4.29 billion, up ~6.2% year-over-year - Full-year 2026 consensus: ~$1.49 adjusted EPS and ~$18.17 billion revenue - By segment, Zacks estimates project natural gas pipeline revenue rising to about $2.72 billion from $2.54 billion a year ago, though segment earnings are seen roughly flat around $1.43 billion
Notably, KMI has a mixed history on revenue versus a cleaner beat record on EPS — it has topped or matched Street EPS estimates in each of the last four quarters.
The setup matters because Q1 2026 was described by management as one of the best quarters in company memory. Kinder Morgan had a remarkable first quarter, the best CEO Kim Dang could remember, with adjusted EPS up 41% and EBITDA growing by 18%, with every segment delivering growth versus the first quarter of 2025 and every segment outperforming budget. Natural gas drove the most significant share of the outperformance, benefiting from winter Storm Fern and the extended cold in the Northeast.
That strength drove a guidance raise: on full year guidance, KMI now expects to exceed its EBITDA budget by more than 3%, excluding contributions from the Monument acquisition, and while most of that outperformance came from Q1, continued outperformance in the gas group and/or higher oil prices could provide further upside for the balance of the year. CFO David Michels quantified this: for the full year 2026, KMI expects to be more than 3% favorable to budgeted adjusted EBITDA — over $250 million of additional EBITDA contribution — with additional outperformance expected for the rest of the year.
The key swing factor for Q2: how much of that Q1 tailwind (winter storm demand, weather-driven pricing/volatility) was one-time versus recurring. On the Q1 call, management characterized the outperformance bucket as largely tied to contract timing, weather, and commodity prices rather than a permanent step-change in the base business — meaning Q2 comps will be a real test of whether "outperformance" continues without the storm benefit.
Investors will want an updated read on the ">3% above budget" framing given after Q1. Original 2026 budget metrics were: net income attributable to KMI of $3.1 billion, adjusted EPS of $1.36, adjusted EBITDA of $8.6 billion, and a year-end Net Debt-to-Adjusted EBITDA ratio of 3.8 times, with a 2% dividend increase to $1.19 per share. Management already signaled leverage should improve to 3.7x by year-end versus the original 3.8x budget, aided by EBITDA outperformance.
KMI closed its ~$505 million acquisition of the Monument Pipeline system (225 miles of Houston-area gas pipe, long-term take-or-pay contracts with a ~9-year weighted average life) on May 1, 2026, so Q2 will include its first partial-quarter contribution. Management has said this deal is additive to guidance and comes at "an expected medium-term investment-to-EBITDA multiple of less than 8.0 times," improving over time as expansion capital is deployed.
Two large Southeast gas projects — the ~$3.5 billion South System Expansion 4 (SSE4) and the ~$1.7 billion Mississippi Crossing (MSX) — are awaiting FERC certificate orders that the company has said it expects by July 31, 2026, i.e., right around/after this earnings call. A favorable ruling would firmly lock in roughly $5 billion of committed growth capital and could be a headline item on the call regardless of the quarter's numbers.
KMI and Phillips 66 completed a successful second open season on the proposed Western Gateway products pipeline (serving Phoenix/California/Las Vegas markets) in April. On the Q1 call, management indicated the next steps were finalizing transportation service agreements and JV terms with Phillips 66, with an expectation to FID the project sometime in the next few months assuming resolution is reached. Any update on JV economics, capital contribution structure, or a formal FID would be a significant data point, given the project is not yet in the $10.1 billion backlog.
The project backlog stood at $10.1 billion at Q1-end, up modestly from Q4, with natural gas projects accounting for approximately 92% of the backlog and nearly 60% tied to power generation and local distribution company demand. Management flagged that a meaningful amount of "shadow backlog" opportunities — spanning power, LNG, and industrial demand from Arizona to Florida — are expected to convert into approved projects during 2026. Watch for new backlog additions in Q2, particularly data-center-linked deals (three were added in Q1).
KMI's CO2 segment carries roughly 10% unhedged oil exposure; management noted the company was about 90% hedged for 2026 and roughly 76% hedged for 2027 near $60-65/bbl. Given oil price volatility this year, any swing in realized crude/NGL pricing will show up here.
Net Debt-to-Adjusted EBITDA fell to 3.6x at Q1-end — the lowest level since before the 2014 consolidation — following Moody's upgrade to Baa1, aligning all three rating agencies at the equivalent of BBB+. Management guided leverage back up modestly to 3.7x by year-end as capex ramps and Monument's EBITDA contribution is only partial-year; confirming this trajectory will matter for capital-allocation optionality (buybacks, further M&A, dividend growth pace).
Executive Chairman Rich Kinder used the Q1 call to lay out an increasingly bullish secular backdrop that investors will likely want reaffirmed. He noted that projections for natural gas demand growth, driven primarily by LNG feed gas demand and gas-fired electric generation, have consistently proven understated, and that recent geopolitical events — including damage to Qatari liquefaction facilities and Strait of Hormuz shipping uncertainty — should increase preference for U.S.-sourced LNG. He also cited a sharp upward revision in industry data: S&P Global Market Intelligence reported utilities plan to add 153 gigawatts of gas-fired generation capacity in coming years, primarily to serve data centers, twice the estimate from a year earlier. Management's own long-range forecast now calls for U.S. gas demand reaching 150 Bcf/d by 2031, up about 27% from current levels, with utilization on KMI's five largest gas pipelines already above 90% — underscoring both the strength of the base business and the case for continued expansion capital.
Heading into Q2, KMI carries a high bar: a record Q1, an already-raised full-year outlook, an investment-grade balance sheet strengthened further by a ratings upgrade, and a rapidly growing, largely take-or-pay backlog tied to structurally growing power and LNG demand. The key questions for the print are less about whether the long-term gas demand story is intact (management sounds increasingly confident on that front) and more about (1) whether Q2 shows continued organic outperformance versus budget absent one-time weather benefits, (2) early contribution from Monument, (3) progress on converting the Western Gateway JV and shadow-backlog opportunities into firm commitments, and (4) confirmation that leverage and dividend growth trajectories remain on track. With consensus modeling ~11% EPS growth and mid-single-digit revenue growth, a clean beat-and-raise similar to Q1 (even if smaller in magnitude) would likely be well received, while any signs that Q1's outperformance was purely weather-driven could temper the recent stock strength.