Loading blog posts...
July 19, 2025 • 3 min read
Today, we're diving into the latest quarterly report from Kinder Morgan (NYSE: KMI), one of North America's largest and most important energy infrastructure companies. By examining their Q2 2025 income statement, we can get a clear view of their financial health and see how they're navigating the current energy landscape. The takeaway? The pipeline giant delivered a strong quarter with impressive growth in both revenue and profit, largely fueled by its core natural gas business.
Kinder Morgan reported total revenues of $4.0 billion for the quarter ending June 30, 2025, a solid 13% increase from the $3.6 billion reported in the same quarter last year. More importantly, this top-line growth translated into a healthier bottom line. The company's net income jumped 23% to $742 million, up from $602 million a year ago.
To better visualize how the company's revenue is converted into profit, the following flow diagram breaks down the major components of the income statement for the quarter.
Please log in to view diagrams.
As the chart shows, while the company's gross margin is a robust 70%, operating the vast network of pipelines and terminals is costly, resulting in an operating margin of 28.5% and a final net margin of 18.4%.
Kinder Morgan's performance is best understood by looking at its distinct business segments.
Natural Gas Pipelines: This is the company's largest and most critical division, and it was the star of the show this quarter. The segment generated $2.5 billion in revenue and saw its earnings before DD&A (Depreciation, Depletion, and Amortization), or EBDA, climb by $217 million compared to last year. This performance was driven by higher transport volumes and contributions from recent acquisitions, like the Outrigger Energy system in the Permian Basin.
Terminals: The Terminals segment, which stores and handles products like gasoline and chemicals, also had a good quarter. Its EBDA increased by $19 million to $300 million. The company specifically pointed to higher charter rates for its Jones Act tankers—vessels that operate between U.S. ports—as a key reason for the boost.
Products Pipelines & CO2: The other two segments had a mixed performance. The Products Pipelines segment, which transports refined petroleum products, saw its EBDA dip slightly by $9 million. The CO2 segment, which produces and transports carbon dioxide for use in enhanced oil recovery, experienced a more significant earnings drop. However, this was largely due to a one-time gain from a divestiture in the prior year's quarter, making the year-over-year comparison less straightforward.
Kinder Morgan's strong second-quarter results underscore the continued demand for energy infrastructure. The growth in the natural gas segment highlights the critical role of pipelines in powering the economy. As a sign of confidence in its financial stability and outlook, the company announced a quarterly dividend of $0.2925 per share, a 2% increase over the previous year.
In conclusion, Kinder Morgan's latest filing reveals a company that is successfully leveraging its massive asset base to generate strong returns, even as it navigates the varying performance across its different business lines. The engine of the company, its Natural Gas Pipelines segment, continues to run strong, positioning KMI as a central player in the North American energy market.
Last updated: July 19, 2025