SRE
Sempra
NYSE
8-K: Sempra Announces Record Capital Plan Increase and Strong 2023 Results
Sentiment:
Annual Results
27 February 2024 10:55 AM
Sempra reported strong 2023 financial results, highlighted by a 20% increase in its capital plan to $48 billion and a raised annualized common stock dividend for the 14th consecutive year.
Better than expected
Sempra's full-year 2023 GAAP earnings of $3.03 billion were significantly better than the $2.09 billion reported in 2022.
Summary
- Sempra reported full-year 2023 GAAP earnings of $3.03 billion, or $4.79 per diluted share, compared to $2.09 billion, or $3.31 per diluted share in 2022.
- Adjusted full-year earnings were $2.92 billion, or $4.61 per diluted share, in both 2023 and 2022.
- The company's fourth-quarter 2023 GAAP earnings were $737 million, or $1.16 per diluted share, compared to $438 million, or $0.69 per diluted share in the fourth quarter of 2022.
- Sempra is forecasting a record five-year capital plan of approximately $48 billion, a 20% increase from the previous plan, with over 90% focused on Sempra California and Sempra Texas.
- The company narrowed its full-year 2024 EPS guidance range to $4.60 to $4.90 and issued a full-year 2025 EPS guidance range of $4.90 to $5.25.
- Sempra affirmed its projected long-term EPS growth rate of approximately 6% to 8%.
Sentiment
Score: 8
Explanation: The document conveys a positive sentiment due to strong earnings growth, a significant increase in the capital plan, and a raised dividend. The company's future guidance and long-term growth targets also contribute to the positive outlook. However, some negative impacts from foreign currency and one-off items temper the overall sentiment.
Positives
- Sempra's GAAP earnings for 2023 significantly increased compared to 2022.
- The company has increased its capital plan by 20%, indicating strong growth prospects.
- Sempra has a strong focus on investments in California and Texas.
- The company has increased its dividend for the 14th consecutive year, demonstrating a commitment to shareholder returns.
- Sempra has provided positive EPS guidance for 2024 and 2025, indicating confidence in future performance.
- Sempra Infrastructure delivered strong financial and operational performance in 2023.
Negatives
- Adjusted full-year earnings were flat year-over-year at $2.92 billion.
- Fourth-quarter 2023 adjusted earnings decreased slightly compared to the same period in 2022.
- The company experienced a $44 million equity loss from investment in Oncor due to a rate base write-off.
- Sempra experienced a $235 million negative impact from foreign currency and inflation on monetary positions in Mexico.
Risks
- The company faces risks related to California wildfires and potential liabilities.
- Regulatory decisions and actions by various bodies could impact the company's operations and financial results.
- The success of business development efforts and construction projects is subject to risks, including delays and cost overruns.
- Cybersecurity threats pose a risk to the company's systems and infrastructure.
- Changes in macroeconomic trends and capital market conditions could affect the company's ability to raise capital.
- The company is exposed to risks related to climate and sustainability policies, including the potential for stranded assets.
- Weather events, natural disasters, and other disruptions could impact operations and financial results.
- Oncor's ability to pay dividends could be impacted by regulatory and governance requirements.
Future Outlook
Sempra has narrowed its full-year 2024 EPS guidance range to $4.60 to $4.90 and announced a full-year 2025 EPS guidance range of $4.90 to $5.25, representing a 7% year-over-year increase from the midpoint of the 2024 guidance. The company also affirmed its projected long-term EPS growth rate of approximately 6% to 8%.
Management Comments
- Jeffrey W. Martin, chairman and CEO of Sempra, stated that the company's goal is to give investors exposure to attractive growth in the energy infrastructure sector with the support of a growing dividend.
- Karen Sedgwick, executive vice president and chief financial officer of Sempra, noted that the increased capital plan supports the company's confidence in delivering sustainable, long-term value for its owners.
Industry Context
This announcement reflects the broader trend of increased investment in energy infrastructure, particularly in the transmission and distribution sectors, driven by the growing need for safer, more reliable, and cleaner energy. Sempra's focus on California and Texas aligns with the significant economic growth and energy demands in these regions. The company's expansion into LNG and other lower-carbon fuels also reflects the global push for decarbonization and energy security.
Comparison to Industry Standards
- Sempra's 20% increase in its capital plan to $48 billion is a significant commitment to growth, which is higher than many of its peers in the utility sector.
- Companies like NextEra Energy (NEE) and Duke Energy (DUK) also have large capital expenditure plans, but Sempra's focus on California and Texas provides a unique regional advantage.
- Sempra's long-term EPS growth target of 6-8% is competitive with other large utilities, such as Southern Company (SO) and Dominion Energy (D), which typically target growth in the mid-single digits.
- The company's investment in LNG projects like Port Arthur LNG and ECA LNG positions it well to capitalize on the growing global demand for natural gas, similar to Cheniere Energy (LNG) and Tellurian (TELL).
- Sempra's focus on renewable energy and battery storage in California aligns with the state's aggressive decarbonization goals, which is a trend also seen in other utilities like PG&E (PCG) and Edison International (EIX).
Stakeholder Impact
- Shareholders will benefit from increased dividends and potential long-term growth.
- Customers will benefit from investments in safer, more reliable, and cleaner energy infrastructure.
- Employees will have opportunities for growth and development within the expanding company.
- Suppliers and contractors will benefit from increased capital spending on projects.
- Creditors will have confidence in the company's financial stability and growth prospects.
Next Steps
- Sempra will continue to execute its $48 billion capital plan.
- The company will continue to advance development efforts for its various LNG, hydrogen, and carbon capture projects.
- Sempra will continue to progress with general rate cases before the California Public Utilities Commission, with a proposed decision scheduled for the second quarter of 2024.
Key Dates
- February 27, 2024: Date of the press release announcing 2023 financial results and capital plan increase.
- April 1, 2024: Record date for semi-annual dividend on preferred stock.
- April 15, 2024: Payment date for quarterly common stock dividend and semi-annual preferred stock dividend.
- March 21, 2024: Record date for quarterly common stock dividend.
Keywords
Sempra, Capital Plan, Earnings, Dividend, EPS, Energy Infrastructure, Sempra California, Sempra Texas, Sempra Infrastructure, LNG, Oncor, Utilities
SRE
Sempra
NYSE
Sector: Utilities
Filings with Classifications
Better than expected
23 June 2025 6:56 AM
Regulatory Update
- The new Unified Tracker Mechanism (UTM) is expected to improve Oncor's earnings, cash flows, and credit metrics.
- The UTM is projected to improve Oncor's earned annual returns on equity by approximately 50 to 100 basis points.
- The mechanism allows for more timely recovery of capital investments, reducing regulatory lag compared to previous methods.
Capital raise
13 May 2025 4:20 PM
Debt Offering Announcement
- Southern California Gas Company is raising $1.1 billion through the issuance of first mortgage bonds.
- The funds are intended for general corporate purposes.
Capital raise
8 May 2025 8:07 PM
Quarterly Report
- Sempra established an ATM program providing for the offer and sale of shares of Sempra common stock having an aggregate gross sales price of up to $3.0 billion.
- Sempra entered into forward sale agreements under the ATM program with Bank of America, N.A. and Wells Fargo Bank, N.A.
Better than expected
8 May 2025 8:07 PM
Quarterly Report
- Sempra's Q1 2025 earnings attributable to common shares increased to $906 million, or $1.39 per share, compared to $801 million, or $1.27 per share, in the prior year.
Better than expected
8 May 2025 10:53 AM
Earnings Release
- Sempra's first-quarter 2025 GAAP earnings increased to $906 million ($1.39 per diluted share) from $801 million ($1.26 per diluted share) in the first quarter of 2024.
- Adjusted first-quarter 2025 earnings rose to $942 million ($1.44 per diluted share) from $854 million ($1.34 per diluted share) in 2024.
Better than expected
28 March 2025 4:14 PM
Proxy Statement
- Sempra's three-year total shareholder return far outpaced the return of the S&P 500 Utilities Index and more than tripled the returns of the S&P 500 and S&P 500 Utilities Indices since the beginning of this century (from December 31, 1999 through December 31, 2024).
Capital raise
25 March 2025 4:17 PM
Debt Offering
- San Diego Gas & Electric Company is raising $850 million through the issuance of 5.400% First Mortgage Bonds, Series CCCC, due 2035.
- The net proceeds are estimated to be approximately $842.1 million after deducting the underwriting discount but before deducting the Companys estimated offering expenses.
Capital raise
25 February 2025 4:57 PM
Annual Report
- Sempra established an ATM program providing for the offer and sale of shares of Sempra common stock having an aggregate gross sales price of up to $3.0 billion.
- Sempra entered into a forward sale agreement under the ATM program for the sale of 2,909,274 shares of Sempra common stock.
Worse than expected
25 February 2025 4:57 PM
Annual Report
- Earnings attributable to common shares decreased from $3.030 billion in 2023 to $2.817 billion in 2024.
- Total revenue decreased from $16.720 billion in 2023 to $13.185 billion in 2024.
Delay expected
25 February 2025 4:57 PM
Annual Report
- The ECA LNG Phase 1 project is expected to commence commercial operations in the spring of 2026, which is later than previously anticipated.
- The first and second trains of the PA LNG Phase 1 project are expected to commence commercial operations in 2027 and 2028, respectively, which is later than previously anticipated.
Worse than expected
25 February 2025 10:54 AM
Earnings Release
- Full-year 2024 GAAP earnings decreased compared to 2023.
- The revision of the full-year 2025 EPS guidance range to $4.30 to $4.70 may be viewed negatively.
Capital raise
21 November 2024 4:05 PM
Debt Offering
- Sempra closed a public offering of $400 million of 6.625% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2055 and $600 million of 6.550% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2055.
- The total proceeds to Sempra from the sale of the notes were approximately $990 million, after deducting underwriting discounts but before deducting offering expenses estimated at $1.7 million.
Capital raise
6 November 2024 3:40 PM
Quarterly Report
- Sempra established an ATM program to offer and sell shares of common stock with an aggregate gross sales price of up to $3.0 billion.
- The company intends to use the net proceeds for working capital and other general corporate purposes, including to partly finance anticipated increases to its long-term capital plan and to repay outstanding commercial paper and potentially other indebtedness.
Worse than expected
6 November 2024 3:40 PM
Quarterly Report
- Sempra's third quarter earnings were worse than the same period last year due to lower revenues and higher interest expenses.
- Sempra California's earnings were worse than the same period last year due to lower income tax benefits and higher net interest expenses.
- Sempra Texas Utilities' earnings were worse than the same period last year due to lower equity earnings from Oncor Holdings.
Capital raise
6 November 2024 10:50 AM
Quarterly Report
- The company has put in place a $3 billion at-the-market (ATM) equity offering program to support general corporate purposes including its future financing needs.
Worse than expected
6 November 2024 10:50 AM
Quarterly Report
- Third-quarter 2024 GAAP and adjusted earnings were lower compared to the same period in 2023.
- The company has lowered its full-year 2024 GAAP EPS guidance range.
Capital raise
9 September 2024 4:02 PM
Debt Offering Announcement
- Sempra has raised $1.25 billion through the issuance of junior subordinated notes.
- The net proceeds to the company are approximately $1.238 billion after deducting underwriting discounts.
Capital raise
9 August 2024 4:45 PM
Debt Issuance Announcement
- Southern California Gas Company is raising $600 million through the issuance of First Mortgage Bonds.
- The net proceeds are estimated to be approximately $593.2 million after deducting the underwriting discount.
Worse than expected
6 August 2024 3:48 PM
Quarterly Report
- Sempra's year-to-date earnings were worse than the same period last year, primarily due to lower income tax benefits and unrealized losses on commodity derivatives.
Capital raise
6 August 2024 3:48 PM
Quarterly Report
- Sempra completed an offering of 19,242,010 shares of its common stock in November 2023.
- Sempra has forward sale agreements for 17,142,858 shares of its common stock, which may be settled no later than December 31, 2024.
Delay expected
6 August 2024 10:54 AM
Quarterly Report
- The Energa Costa Azul LNG Phase 1 project has experienced labor and productivity challenges, which has delayed the expected mechanical completion and first LNG to 2025, with commercial operations targeted for spring 2026.
Worse than expected
6 August 2024 10:54 AM
Quarterly Report
- Sempra's adjusted earnings for the second quarter of 2024 were lower than the same period in 2023.
- Sempra's adjusted earnings for the first six months of 2024 were also lower than the same period in 2023.
Capital raise
31 May 2024 4:02 PM
Debt Offering Announcement
- Sempra raised $500 million through the issuance of junior subordinated notes.
- The proceeds will be used for general corporate purposes.
Capital raise
7 May 2024 4:29 PM
Quarterly Report
- Sempra completed an offering of 17,142,858 shares of common stock in November 2023.
- The company expects to settle forward sale agreements related to the offering by December 31, 2024, which may result in additional cash proceeds.
- Sempra may elect cash settlement or net share settlement for all or a portion of its obligations under the forward sale agreements.
Worse than expected
7 May 2024 4:29 PM
Quarterly Report
- Sempra's earnings were worse than expected due to lower natural gas prices and unrealized losses on commodity derivatives.
- Sempra California's earnings were worse than expected due to lower CPUC base operating margin and higher interest expenses.
- Sempra Infrastructure's earnings were worse than expected due to unrealized losses on commodity derivatives and lower transportation revenues.
Worse than expected
7 May 2024 11:02 AM
Quarterly Report
- Sempra's GAAP earnings decreased from $969 million in Q1 2023 to $801 million in Q1 2024.
- Adjusted earnings also decreased from $922 million in Q1 2023 to $854 million in Q1 2024.
Better than expected
17 April 2024 4:18 PM
Proxy Statement Supplement
- Sempra achieved record revenue of $16.7B in 2023.
- GAAP EPS has grown at a 22.9% CAGR and adjusted EPS has grown at a 10.3% CAGR from 2018-2023.
- Sempra increased its five-year capital plan by 20% to $48 billion.
Better than expected
25 March 2024 8:01 AM
Proxy Statement
- Sempra's business strategy helped the company deliver a series of record financial results in 2023.
- The company's total shareholder return has outpaced the return of the S&P 500 Utilities Index during the past one, three and five years.
- Sempra California reduced methane emissions by approximately 70% from 2015 levels through 2022.
- 2023 annual bonuses were achieved at 176% of target based on performance on ABP Earnings, Safety Measures, and Sustainability Measures.
- The overall payout for the 2021-2023 LTIP awards based on relative TSR and EPS growth was 163% of target.
Capital raise
19 March 2024 4:21 PM
Debt Issuance Announcement
- San Diego Gas & Electric is raising $600 million through the issuance of first mortgage bonds.
- The net proceeds are estimated to be approximately $588.7 million after deducting the underwriting discount but before deducting the company's estimated offering expenses.
Capital raise
18 March 2024 4:40 PM
Debt Issuance Announcement
- Southern California Gas Company raised $500 million through the issuance of First Mortgage Bonds.
- The proceeds will be used for general corporate purposes.
Capital raise
14 March 2024 4:01 PM
Debt Offering Announcement
- Sempra has raised $600 million through the issuance of 6.875% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2054.
- The net proceeds to the company were approximately $594 million after deducting underwriting discounts but before other expenses.
Capital raise
13 March 2024 4:08 PM
Debt Offering Announcement
- Southern California Gas Company is raising $500 million through the issuance of First Mortgage Bonds.
- The net proceeds are estimated to be approximately $492.4 million after deducting underwriting discounts.
Better than expected
27 February 2024 10:55 AM
Annual Results
- Sempra's full-year 2023 GAAP earnings of $3.03 billion were significantly better than the $2.09 billion reported in 2022.
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