By Tanay Dhumal
(Reuters) -Kinder Morgan on Wednesday posted lower-than-expected profit for the third quarter, as higher interest expenses offset strength in its natural gas and products pipeline segment.
The pipeline and terminal operator reported an adjusted profit of 25 cents per share for the quarter ended Sept. 30, compared with analysts' average estimate of 26 cents, according to LSEG data.
Shares of Kinder Morgan (NYSE:KMI) were down 1.3% at $16.91 in after-market trading.
The U.S. Federal Reserve's rapid interest rate hikes to tame inflation have made borrowing more expensive for businesses.
"We expect to finish 2023 slightly below our plan on a full-year basis, due to lower-than-expected commodity prices, delayed RNG (renewable natural gas) projects and higher pipeline integrity expense," the company said.
However, CEO Kimberly Allen Dang said in a post-earnings call "the 2024 curve is above 2023" and there are a "lot of tailwinds coming in this business."
"Storage rates have increased significantly. So we're able to charge more for storage. Obviously, on our contracts and Products and Terminals, we have inflation escalators, which help increase the EBITDA in those businesses."
Lower contribution from the carbon dioxide (CO2) transportation segment also pressured the company's earnings, hurt by weaker prices of natural gas liquids and CO2, lower volumes and higher power costs.
The Houston-based firm's earnings from the CO2 segment dropped to $175 million in the quarter from $195 million.