SRE
Sempra
NYSE
8-K: Sempra Reports Lower Third-Quarter Earnings, Adjusts Full-Year Guidance
Sentiment:
Quarterly Report
6 November 2024 10:50 AM
Sempra's third-quarter 2024 earnings decreased compared to the same period last year, leading to an adjustment in full-year GAAP earnings guidance, while affirming adjusted EPS guidance.
Worse than expected
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
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.
Summary
- Sempra reported a GAAP earnings of $638 million, or $1.00 per diluted share, for the third quarter of 2024, down from $721 million, or $1.14 per diluted share, in the third quarter of 2023.
- Adjusted earnings for the third quarter of 2024 were $566 million, or $0.89 per diluted share, compared to $685 million, or $1.08 per diluted share in the same period last year.
- For the first nine months of 2024, GAAP earnings were $2.152 billion, or $3.38 per diluted share, compared to $2.293 billion, or $3.63 per diluted share, in the first nine months of 2023.
- Adjusted earnings for the first nine months of 2024 were $1.987 billion, or $3.12 per diluted share, compared to $2.201 billion, or $3.48 per diluted share, in the first nine months of 2023.
- The company has updated its full-year 2024 GAAP EPS guidance range to $4.86 to $5.16, while affirming its full-year 2024 adjusted EPS guidance range of $4.60 to $4.90.
- Sempra also affirmed its full-year 2025 EPS guidance range of $4.90 to $5.25.
- A $3 billion at-the-market (ATM) equity offering program has been put in place to support general corporate purposes.
- Sempra is affirming its projected long-term EPS growth rate of approximately 6% to 8%.
Sentiment
Score: 6
Explanation: The sentiment is moderately positive. While earnings are down and GAAP guidance has been lowered, the company is affirming adjusted EPS guidance and long-term growth targets. There are also positive developments in infrastructure projects and capital investment plans.
Positives
- Sempra is focused on improving safety and operations and delivering more affordable services to customers.
- Investments in energy storage and infrastructure modernization benefited customers with minimal energy interruptions despite high-heat conditions.
- The business outlook for Oncor continues to strengthen with significantly higher levels of capital investment expected.
- Sempra Infrastructure is making progress developing projects in the U.S. Gulf and northern Mexico.
- Port Arthur LNG Phase 1 construction remains on time and on budget.
- The company is affirming its projected long-term EPS growth rate of approximately 6% to 8%.
Negatives
- 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.
- The results for the first nine months of this year do not reflect the impact of the Sempra California general rate case decision that is pending at the California Public Utilities Commission (CPUC).
- The company experienced a $67 million negative impact from foreign currency and inflation on monetary positions in Mexico in the third quarter of 2024.
Risks
- The pending Sempra California general rate case decision at the CPUC could impact future revenues.
- The System Resiliency Plan (SRP) for Oncor is under review with the Public Utility Commission of Texas (PUCT).
- The company faces risks related to completing construction projects on schedule and budget.
- There are risks associated with obtaining third-party consents and approvals for projects.
- The company is exposed to macroeconomic trends that could change capital expenditure plans.
- Cybersecurity threats pose a risk to the company's systems and infrastructure.
- The availability and cost of capital resources could impact the company's ability to meet obligations.
- Volatility in inflation, interest rates, and commodity prices could impact customer rates and the company's ability to pass through higher costs.
- Climate policies and regulations could impact the company's operations and assets.
- Weather, natural disasters, and other events could disrupt operations and cause financial losses.
Future Outlook
Sempra is focused on executing its business plan, improving safety and operations, and delivering more affordable services. The company expects significantly higher levels of capital investment in grid expansion, modernization, and reliability. Sempra is also advancing development of its expansion projects in response to the ongoing global demand for cleaner fuels.
Management Comments
- We are pleased with our operational and financial results for the third quarter, said Jeffrey W. Martin, chairman and CEO of Sempra.
- We remain focused on executing our business plan, improving safety and operations, and delivering more affordable services to our customers.
Industry Context
The report highlights the increasing demand for electricity in Texas and the need for infrastructure investments to support this growth. The focus on LNG exports reflects the global trend towards energy security and diversification. The company's dual-coast LNG strategy positions it well in the market.
Comparison to Industry Standards
- Sempra's results are being compared to its own performance in previous periods, specifically the third quarter and first nine months of 2023.
- The report mentions Oncor's capital expenditure plans, which are significant and reflect the need for grid modernization and expansion in Texas, a trend seen across the US.
- The focus on LNG projects is in line with other major energy companies that are investing in natural gas infrastructure to meet global demand.
- The company's emphasis on safety and reliability aligns with industry standards for utility companies.
Stakeholder Impact
- Shareholders may be concerned about the lower earnings and reduced GAAP guidance, but reassured by the affirmed adjusted EPS guidance and long-term growth targets.
- Customers in California will be impacted by the pending rate case decision.
- Customers in Texas will benefit from increased investment in grid reliability and expansion.
- Employees will be impacted by the company's focus on safety and operational excellence.
- Suppliers and contractors will benefit from the increased capital expenditure plans.
Next Steps
- The company will continue to execute its business plan, focusing on safety, operations, and customer affordability.
- Oncor will provide an update on its capital plan on the next earnings call in February 2025.
- The company will continue to advance development of its expansion projects.
- The final decision on the Sempra California general rate cases is expected by the end of the year.
Key Dates
- 2024-09-30: End of the third quarter for which financial results are reported.
- 2024-11-06: Date of the earnings release and 8-K filing.
- 2024-Q4: Expected commercial operations of the Gasoducto Rosarito Expansion Pipeline.
- 2025-02: Oncor will provide an update on its capital plan on the next earnings call.
- 2026-Spring: Expected commercial operation of Energa Costa Azul (ECA) LNG Phase 1.
Keywords
Sempra, Earnings, Utilities, Infrastructure, LNG, Oncor, Capital Expenditures, EPS, Energy, Texas, California, Rate Case
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.
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.
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 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.
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.
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.
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.
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 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.
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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