The country's largest energy infrastructure company Kinder Morgan (KMI) - Get Report is set to report fourth quarter earnings after markets close Wednesday, Jan. 18, and analysts are calling for EPS of 18 cents on $3.5 billion in revenue, according to FactSet.
The $50 billion company's shares were trading slightly down to $22.50 apiece Wednesday ahead of the earnings report.
If Kinder Morgan posts a big earnings beat or miss, it's likely that will be the biggest news on the day for the pipeline operator, as analysts suspect there will be little else to move the needle in the report.
"While many questions will be asked, we expect little incremental news on the [earnings] call, with major announcements (such as the trajectory of lifting the dividend) saved for next week's Analyst Day," J.P.Morgan analyst Jeremy Tonet wrote in a Monday research note.
Still, the firm will look for any hints on Kinder Morgan's preferred method, e.g. an IPO or joint venture, of monetizing a portion of the company's $6.8 billion Trans Mountain Expansion Project or its CO2 business.
J.P.Morgan also has its eyes peeled for updates on the company's other key projects, including the $2 billion Elba Liquefaction Project, which will add liquefaction and export capability to its subsidiary's existing liquefied natural gas terminal located at Elba Island in Chatham County, Georgia.
The analysts also hope for an update on Kinder Morgan's Utopia project, a 215-mile, 12-inch diameter pipeline that the company plans to construct between Harrison County, Ohio and its existing pipeline and facilities in Fulton County, Ohio; and any news related to the number of expansion projects planned for the company's 11,800-mile Tennessee Gas Pipeline that currently transports natural gas from Louisiana, the Gulf of Mexico and south Texas to the Northeast, including New York City and Boston.
J.P.Morgan expects operating results in the Eagle Ford Shale region in southern Texas and in the mid-continent region to weigh on Kinder Morgan's natural gas margins, but suspects the company's prospects for coal exports will improve. The firm is calling for below-Street earnings of 17 cents per share.
As for the bigger picture, the firm anticipates a new administration will reverse the trend of "ever-longer reviews and executive branch 'political hostage taking'" of pipeline projects, although state and local level risks remain a concern. As such, J.P.Morgan hopes to hear more commentary from operators like Kinder Morgan this earnings season on what can be expected from policymakers following President-elect Donald Trump's Jan. 20 inauguration.
Investors will likely look for updates on the company's corporate structure which has been in flux recently. On Jan. 9 the Tusla, Okla.-based company, which has been the target of activist investors Keith Meister of Corvex Management LP and Eric Mandelblatt of Soroban Capital Partners LLC in recent months, announced it would eliminate its incentive distribution rights and economic general partner interest in its MLP, Williams Partners (WPZ) , in exchange for 289 million common units of Williams Partners.
The transaction is valued at roughly $11.4 billion, based on Williams Partners' $39.30 per unit closing price Jan. 6.
According to FactSet, Williams is expected to report earnings of 19 cents per share on $1.9 billion in revenue.