Kinder Morgan (KMI) Q3 Earnings Spotlight Record Profit And Backlog Surge

Kinder Morgan came into this Q3 2026 report with its stock quietly grinding higher over the past month, only to slip 0.7% to US$33.72 on the day after results. The move looks mild compared with what the company just posted. Quarterly net income reached US$764 million on revenue of US$4.5b, and management highlighted a record quarter alongside a sharply higher project backlog that now stretches Kinder Morgan’s growth runway well into the next decade.

Like the record profit but unsure how Kinder Morgan’s long project backlog stacks up against other asset-heavy infrastructure plays? Check out the list of solid balance sheet and fundamentals stocks (26 results) to see how peers with sturdy finances compare.

Q3 2026 Earnings Summary

• Total Revenue (Q3 2026 vs. Q3 2025): US$4,531 million vs. US$4,146 million (up about 9.3%)
• Net Income Excl. Extra Items (Q3 2026 vs. Q3 2025): US$764 million vs. US$624 million (up about 22.4%)
• Basic EPS (Q3 2026 vs. Q3 2025): US$0.34 vs. US$0.28 (up about 22.3%)
• Net Profit Margin, Trailing 12 Months (2026 vs. 2025): 19.6% vs. 16.5% (about 3.1 percentage points higher)

Earnings are one thing, but Kinder Morgan investors who care about what really supports the equity often focus on the cash flows that sit behind those headline profits. If you zero in on Kinder Morgan's cash generation and plug it into a discounted cash flow view, the stock could be a dramatic 31% undervalued.

Kinder Morgan’s Backlog Ambition Meets Real Sanctions

Kinder Morgan’s bullish story hinges on turning a paper backlog into contracted earnings power.

"Analysts expect Kinder Morgan to keep converting its roughly $10b sanctioned growth backlog and shadow opportunity set tied to natural gas, LNG and power demand into additional contracted EBITDA over the next several years."

Q3 shows tangible progress toward that ambition. The approved expansion slate grew from US$9.6b to US$14.4b after Southeast Connector and Permian Link were sanctioned as long duration, take or pay gas projects. Management now ties this enlarged backlog to roughly US$2.5b of future EBITDA, while adjusted EBITDA in the quarter grew 9% and net profit margin for the past year reached 19.6%.

Backlog Conversion Risk Versus Kinder Morgan’s Execution

The bear side worries that a big opportunity set never turns into firm, contracted pipes and terminals.

"The growth case depends heavily on converting a roughly US$10b sanctioned backlog and a similar sized opportunity set into new projects that are largely backed by long term contracts, yet several of the larger natural gas and products projects discussed are still in nonbinding stages or awaiting final investment decisions and permits, so delays, permitting setbacks or failure to secure sufficient binding commitments on items like TGP expansions, Permian Link or Western Gateway would reduce the future contribution management currently associates with that backlog and would weigh on the revenue and EBITDA uplift that underpins the Kinder Morgan share price narrative."

Recent numbers partly push back on that concern. Permian Link moved into the sanctioned backlog with Kinder Morgan’s share at about US$4.7b and management describes both it and Southeast Connector as long term, take or pay. Western Gateway has now reached final investment decision with Kinder Morgan’s cash outlay around US$300m. Record Q3 net income of US$764 million, a dividend increase, and leverage near 3.5x suggest execution and balance sheet discipline are holding for now, even though some TGP expansions and other gas projects still sit in earlier commercial phases.

One Narrative has put a figure on that disagreement. → See the Narrative with its higher Fair Value, assumptions and all.

Hunt Quiet Disconnects In Infrastructure

Kinder Morgan reported record profit while its share price reaction stayed comparatively muted. The real opportunity sits in finding stocks that could be undervalued before the market adjusts their pricing.

• Company 1 - 31% below our estimate - build custom chips and secure connectivity to move high performance data workloads through crowded networks.
• Company 2 - 41% below our estimate - ramp high end circuit capacity so AI data centers and defense contractors can deploy faster, more complex hardware.
• Company 3 - 35% below our estimate - tighten operations and shift valve mix toward higher margin aftermarket and nuclear power projects.

Three companies from the same screener. Open all 30 potentially undervalued companies →

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com