SRE
Sempra
NYSE
10-Q: Sempra Reports Third Quarter 2024 Results Amidst Regulatory Shifts
Sentiment:
Quarterly Report
6 November 2024 3:40 PM
Sempra's third quarter 2024 earnings reflect a complex interplay of regulatory changes, operational adjustments, and market fluctuations across its diverse segments.
Worse than expected
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
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.
Summary
- Sempra's third quarter 2024 net income was $759 million, down from $854 million in the same period last year.
- Earnings attributable to common shares were $638 million, compared to $721 million in the third quarter of 2023.
- The company's revenue decreased to $2.776 billion from $3.334 billion year-over-year.
- Sempra California's earnings decreased to $247 million, while Sempra Texas Utilities saw a decrease to $261 million.
- Sempra Infrastructure's earnings increased slightly to $230 million.
- The company's effective income tax rate was a benefit of 32% compared to a benefit of 11% in the same quarter of 2023.
- Sempra's nine-month year-to-date net income was $2.511 billion, compared to $2.762 billion in the same period last year.
- Year-to-date earnings attributable to common shares were $2.152 billion, compared to $2.293 billion in the same period last year.
- Sempra's year-to-date revenue was $9.427 billion, compared to $13.229 billion year-over-year.
Sentiment
Score: 5
Explanation: The document presents a mixed picture with some positive developments offset by negative financial results and ongoing risks. The sentiment is neutral to slightly negative.
Positives
- Sempra Infrastructure saw a slight increase in earnings due to favorable foreign currency and inflation effects.
- Sempra Texas Utilities experienced higher equity earnings from Oncor Holdings due to higher revenues year-to-date.
- Sempra's effective income tax rate was a benefit of 32% in the third quarter of 2024.
Negatives
- Sempra's third quarter earnings were impacted by lower revenues and higher interest expenses.
- Sempra California's earnings were affected by lower income tax benefits and higher net interest expenses.
- Sempra Texas Utilities experienced lower equity earnings from Oncor Holdings due to higher expenses.
- Sempra Infrastructure saw a decrease in earnings due to lower revenues from asset and supply optimization year-to-date.
- Sempra's year-to-date earnings were impacted by lower revenues and higher interest expenses.
Risks
- Sempra's financial performance is subject to regulatory risks, including the outcome of the CPUC's 2024 GRC.
- The company faces risks related to land disputes and permit challenges affecting its ECA Regas Facility.
- Sempra's operations are exposed to commodity price volatility, interest rate fluctuations, and foreign exchange rate risks.
- The company's ability to access capital markets could be constrained by economic conditions or credit rating downgrades.
- Sempra's operations are subject to cybersecurity threats and potential disruptions from natural disasters or other events.
- The company faces risks related to the availability of electric power, natural gas, and storage capacity.
- Oncor's ability to pay dividends may be limited by regulatory requirements and governance commitments.
- Sempra's operations are subject to litigation, arbitration, and other legal proceedings.
- The company faces risks related to climate policies and the transition to lower carbon energy sources.
Future Outlook
The document does not provide specific forward-looking guidance, but it does mention ongoing projects and regulatory proceedings that will impact future results.
Industry Context
The announcement reflects the challenges and opportunities facing energy companies in a changing regulatory and economic environment, particularly in California and Texas. The company is navigating the transition to lower carbon energy sources while maintaining reliability and affordability for customers.
Comparison to Industry Standards
- Sempra's performance is compared to its own historical results, but not explicitly to industry standards.
- The document does not provide specific comparisons to competitors, but it does mention the impact of regulatory decisions by the CPUC, FERC and PUCT.
- The document does not provide specific comparisons to other projects, but it does mention the progress of the PA LNG Phase 1 project and the ECA LNG Phase 1 project.
Stakeholder Impact
- Shareholders may be concerned about the decrease in earnings and the ongoing risks.
- Employees may be affected by potential changes in operations or financial performance.
- Customers may be impacted by changes in rates and service reliability.
- Suppliers and creditors may be affected by the company's financial performance and ability to meet its obligations.
Next Steps
- SDG&E expects to receive a proposed reasonableness review decision for its Track 2 request in the first half of 2025.
- SDG&E expects to submit in the first half of 2025 an additional request to the CPUC in its 2024 GRC, known as a Track 3 request.
- SDG&E and SoCalGas intend to file advice letters in November 2024 to address the implementation of the updated cost of capital.
- Sempra Infrastructure expects the ECA LNG Phase 1 project to commence commercial operations in the spring of 2026.
- Sempra Infrastructure expects the first and second trains of the PA LNG Phase 1 project to commence commercial operations in 2027 and 2028, respectively.
- Sempra Infrastructure expects the Cimarrn Wind project to begin generating energy in late 2025 and commence commercial operations in the first half of 2026.
Legal Proceedings
- SDG&E is involved in lawsuits challenging its franchise agreements with the City of San Diego.
- SoCalGas is facing ongoing litigation related to the Aliso Canyon natural gas leak.
- Sempra Infrastructure is involved in land disputes and permit challenges affecting its ECA Regas Facility.
- Sempra Infrastructure is involved in litigation related to regulatory and other actions by the Mexican government.
- Certain EFH subsidiaries are defendants in personal injury lawsuits related to asbestos exposure.
Related Party Transactions
- Sempra has transactions with unconsolidated affiliates, including Oncor Holdings, Cameron LNG JV, and TAG Norte.
- SDG&E has transactions with SoCalGas and Sempra.
- SoCalGas has transactions with SDG&E and Sempra.
Key Dates
- October 23, 2015: SoCalGas discovered the leak at the Aliso Canyon natural gas storage facility.
- July 2019: The Wildfire Legislation was signed into law in California.
- July 28, 2020: Sempra entered into a Support Agreement with Sumitomo Mitsui Banking Corporation.
- June 29, 2021: The Support Agreement with Sumitomo Mitsui Banking Corporation was amended.
- November 2021: Sempra loaned $300 million to KKR Pinnacle.
- August 2, 2023: Sempra's board of directors declared a two-for-one stock split.
- August 14, 2023: Record date for Sempra's two-for-one stock split.
- August 21, 2023: Distribution date for Sempra's two-for-one stock split.
- August 22, 2023: Sempra's common stock began trading on a post-split basis.
- November 6, 2024: Sempra established an ATM program.
- October 18, 2024: The CPUC issued a proposed decision in the 2024 GRC for SDG&E and SoCalGas.
- October 2024: SDG&E submitted its TO6 filing to the FERC.
- October 2024: The CPUC issued a final decision to modify the CCM.
Keywords
Sempra, earnings, revenue, infrastructure, utilities, regulation, LNG, natural gas, electricity, Oncor, ECA, Port Arthur, financial results, credit rating, risk factors
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.
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 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.
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.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.