SRE
Sempra
NYSE
8-K: Sempra Announces Second Quarter 2024 Earnings, Oncor Reaches Settlement on System Resiliency Plan
Sentiment:
Quarterly Report
6 August 2024 10:54 AM
Sempra reported second-quarter 2024 GAAP earnings of $713 million, or $1.12 per diluted share, and announced a settlement in principle for Oncor's System Resiliency Plan.
Worse than expected
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.
Delay expected
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.
Summary
- Sempra's second-quarter 2024 GAAP earnings were $713 million, or $1.12 per diluted share, compared to $603 million, or $0.95 per diluted share, in the second quarter of 2023.
- Adjusted earnings for the second quarter of 2024 were $567 million, or $0.89 per diluted share, compared to $594 million, or $0.94 per diluted share, in the same period last year.
- For the first six months of 2024, Sempra's GAAP earnings were $1.514 billion, or $2.38 per diluted share, compared to $1.572 billion, or $2.49 per diluted share, in the first half of 2023.
- Adjusted earnings for the first six months of 2024 were $1.421 billion, or $2.24 per diluted share, compared to $1.516 billion, or $2.40 per diluted share, in the first half of 2023.
- Oncor reached a settlement in principle for its System Resiliency Plan, which involves approximately $3 billion in potential capital investments over three years.
- Sempra is updating its full-year 2024 GAAP EPS guidance range to $4.74 to $5.04, while affirming its full-year 2024 adjusted EPS guidance range of $4.60 to $4.90 and its full-year 2025 EPS guidance range of $4.90 to $5.25.
- The company is also affirming its projected long-term EPS growth rate of approximately 6% to 8%.
Sentiment
Score: 6
Explanation: The sentiment is moderately positive due to increased GAAP earnings and reaffirmed guidance, but tempered by lower adjusted earnings and delays in the Energa Costa Azul LNG project.
Positives
- Sempra's GAAP earnings for the second quarter of 2024 showed a significant increase compared to the same period in 2023.
- Oncor's settlement in principle for the System Resiliency Plan is a positive step for future infrastructure development.
- Sempra is reaffirming its adjusted EPS guidance for 2024 and 2025, indicating confidence in its financial outlook.
- The company's long-term EPS growth rate projection remains strong at approximately 6% to 8%.
- The completion of the Wildfire and Climate Resilience Center by San Diego Gas & Electric Co. is a positive development for climate adaptation and resiliency.
- The progress on Port Arthur LNG Phase 2, including the agreement with Aramco, demonstrates strong interest in Sempra's LNG projects.
- Oncor's increased number of interconnection requests indicates growing demand for new infrastructure in its service territory.
Negatives
- Sempra's adjusted earnings for the second quarter of 2024 decreased compared to the same period in 2023.
- Construction at Energa Costa Azul LNG Phase 1 has experienced labor and productivity challenges.
- Sempra's GAAP earnings for the first six months of 2024 were slightly lower than the same period in 2023.
- Adjusted earnings for the first six months of 2024 were also lower than the same period in 2023.
Risks
- The final decision on Sempra California's rate requests is pending and could impact future revenue.
- The implementation of Oncor's System Resiliency Plan is subject to documentation and approval by the Public Utility Commission of Texas.
- The Energa Costa Azul LNG Phase 1 project is facing labor and productivity challenges, which could delay completion.
- Sempra's financial results are subject to various risks, including regulatory decisions, macroeconomic trends, and cybersecurity threats.
- The company's performance is also subject to the impact of climate policies and natural disasters.
Future Outlook
Sempra is updating its full-year 2024 GAAP EPS guidance range to $4.74 to $5.04, while affirming its full-year 2024 adjusted EPS guidance range of $4.60 to $4.90 and its full-year 2025 EPS guidance range of $4.90 to $5.25. The company is also affirming its projected long-term EPS growth rate of approximately 6% to 8%.
Management Comments
- At Sempra, we are pleased with the strength of our financial performance through the first half of the year, said Jeffrey W. Martin, chairman and CEO of Sempra.
- Our company is well-positioned for continued growth across each of our business platforms, which are benefitting from ongoing electrification, economic development, and demand for safe, reliable and cleaner energy.
Industry Context
This announcement reflects the ongoing trends in the energy sector, including the increasing demand for cleaner energy, the expansion of renewable energy infrastructure, and the growing importance of grid resilience. The settlement of Oncor's System Resiliency Plan aligns with the industry's focus on upgrading and modernizing energy infrastructure. The progress in LNG projects also highlights the global demand for secure energy sources.
Comparison to Industry Standards
- Sempra's performance is being compared to other large utility and energy infrastructure companies such as NextEra Energy, Duke Energy, and Southern Company.
- The company's adjusted EPS of $0.89 for the second quarter is being benchmarked against the average EPS of its peers in the utility sector.
- The capital expenditure of $4.217 billion for the first six months of 2024 is being compared to the capital spending of other companies in the energy infrastructure space.
- The progress of Sempra's LNG projects, particularly Port Arthur LNG, is being compared to similar projects by companies like Cheniere Energy and Tellurian.
- The 6-8% long-term EPS growth rate is being assessed against the growth projections of other major utility and energy companies.
Stakeholder Impact
- Shareholders will be impacted by the updated earnings guidance and the progress of key projects.
- Employees will be affected by the ongoing operations and development activities.
- Customers will benefit from the expansion and modernization of energy networks.
- Suppliers will be involved in the various construction and development projects.
- Creditors will be interested in the company's financial performance and debt management.
Next Steps
- Sempra will continue to work on the implementation of Oncor's System Resiliency Plan.
- The company will await the final decision on Sempra California's rate requests.
- Sempra will focus on completing the construction of Energa Costa Azul LNG Phase 1.
- The company will continue to develop the Port Arthur LNG Phase 2 project.
- Sempra will broadcast a live discussion of its earnings results over the internet.
Key Dates
- 2024-01-01: Sempra California's rate requests are expected to be retroactively effective to this date.
- 2024-05: Oncor originally filed its System Resiliency Plan.
- 2024-06-30: End of the second quarter of 2024, the period for which financial results are reported.
- 2024-08-06: Date of the earnings release and 8-K filing.
- 2024-Q4: Oncor expects to begin implementing the System Resiliency Plan in the fourth quarter of this year.
- 2024-End: The final decision on Sempra California's rate requests is expected before the end of the year.
- 2025: Mechanical completion and first LNG are expected to occur at Energa Costa Azul LNG Phase 1.
- 2026-Spring: Commercial operations under the sales and purchase agreements for Energa Costa Azul LNG Phase 1 are targeted for spring.
Keywords
Sempra, Earnings, Oncor, System Resiliency Plan, LNG, Port Arthur LNG, Energa Costa Azul, California Utilities, Adjusted EPS, GAAP Earnings, Infrastructure, Renewable Energy
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.
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 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 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
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.
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.
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.
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.
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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