(Reuters) -Kinder Morgan’s profit more than doubled from the prior quarter and the U.S. pipeline operator raised its annual forecast as well as dividend, benefiting from a sudden demand surge for natural gas as fuel in Texas during the February winter storm.
The company’s shares rose 2.7% in extended trading.
The deep freeze that swept parts of the United States in Februrary and knocked out nearly half of Texas power plants, sent prices for natural gas, used in heating and power generation, soaring to record levels.
While other companies were moving away from natural gas, Kinder Morgan benefited from the sudden surge in demand for the fuel during the cold snap and by selling electricity it would have used otherwise for a unit to the Texas grid instead.
The company also raised its full-year net income forecast to as much as $2.9 billion from a $2.1 billion expectation outlined at the end of the fourth quarter.
“The bulk of our improvement… is due to the strong performance of our Natural Gas Pipelines segment in the face of challenging circumstances presented by the February winter storm”, Chief Executive Officer Steve Kean said.
Though natural gas transport volumes were down 3% overall amid the lingering impact on demand from the COVID-19 pandemic, Kinder Morgan’s natural gas pipelines unit still grew adjusted income by almost 80%. The company’s total adjusted profit jumped to $1.37 billion, or 60 cents per share, in the first quarter ended March 31, from $604 million, or 27 cents per share, in the fourth quarter.
Kinder Morgan also raised its cash dividend by 3% to $1.08 per share per share for 2021.
Reporting by Rithika Krishna in Bengaluru; Editing by Ramakrishnan M.
