8-K: Sempra Announces Solid First-Quarter 2025 Results, Updates Full-Year Guidance

Sempra reported a strong first quarter in 2025, driven by its focus on financial performance and strategic initiatives, and updated its full-year earnings guidance.

Summary

• Sempra reported GAAP earnings of $906 million, or $1.39 per diluted share, for the first quarter of 2025, compared to $801 million, or $1.26 per diluted share, for the same period in 2024.
• Adjusted earnings for the first quarter of 2025 were $942 million, or $1.44 per diluted share, compared to $854 million, or $1.34 per diluted share, in 2024.
• Oncor Electric Delivery Company is executing a $36.1 billion five-year capital plan.
• Oncor had approximately 1,100 active transmission point of interconnection requests in queue, a 35% increase compared to the end of the first quarter of 2024.
• ERCOT updated its estimated cost for the Permian Basin Reliability Plan to approximately $15 billion.
• ERCOT estimated that the cost of either plan to serve the load projection of 150 gigawatts by 2030 would be approximately $20 billion.
• SDGE and SoCalGas filed applications to update their costs of capital with the CPUC for the period of 2026 to 2028.
• Sempra Infrastructure is advancing five significant construction projects, including LNG projects in the U.S. Gulf Coast and northern Mexico.
• Energa Costa Azul LNG Phase 1 continues to target start-up of commercial operations in spring of 2026, and construction at Port Arthur LNG Phase 1 remains on time and on budget.
• Sempra is updating its full-year 2025 GAAP EPS guidance range to $4.25 $4.65 and affirming its full-year 2025 adjusted EPS guidance range of $4.30 to $4.70.
• The company is also affirming its full-year 2026 EPS guidance range of $4.80 to $5.30 and guiding to the high-end or above its projected long-term EPS compound annual growth rate of 7% to 9% for 2025 through 2029.
• Sempra Infrastructure is targeting the sales of Ecogas Mxico and a minority stake in Sempra Infrastructure Partners.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with increased earnings, strategic growth initiatives, and reaffirmed guidance. The company is making progress on key projects and expects future growth.

Positives

• Sempra reported increased GAAP and adjusted earnings for the first quarter of 2025 compared to the same period in 2024.
• Oncor is executing a significant capital plan to address growing electricity demand in Texas.
• Sempra is advancing strategic programs to modernize energy networks and improve system reliability.
• Sempra Infrastructure is making progress on several significant construction projects.
• Sempra reaffirmed its full-year 2025 adjusted EPS guidance range and its full-year 2026 EPS guidance range.
• Sempra is guiding to the high-end or above its projected long-term EPS compound annual growth rate of 7% to 9% for 2025 through 2029.
• The company expects the sales transactions of Ecogas Mxico and a minority stake in Sempra Infrastructure Partners to be accretive to earnings per share.

Negatives

• The report mentions potential impacts from foreign currency and inflation on monetary positions in Mexico.
• The report mentions net unrealized losses on commodity derivatives and interest rate swaps related to the Port Arthur LNG Phase 1 project.

Risks

• The company faces risks related to California wildfires, regulatory decisions, and cybersecurity threats.
• Changes in trade and foreign policy, litigation, and weather events could impact results.
• The availability and cost of capital resources could affect the company's ability to meet its obligations.
• Climate policies and regulations could increase uncertainty for California natural gas distribution companies.
• Oncor's ability to reduce or eliminate its quarterly dividends could impact Sempra's financial performance.

Future Outlook

Sempra is updating its full-year 2025 GAAP EPS guidance range to $4.25 $4.65, affirming its full-year 2025 adjusted EPS guidance range of $4.30 to $4.70, and affirming its full-year 2026 EPS guidance range of $4.80 to $5.30. The company has also guided to the high-end or above its projected long-term EPS compound annual growth rate of 7% to 9% for 2025 through 2029.

Management Comments

• We are pleased to report a solid quarter for Sempra, which is the direct result of continued focus on delivering strong financial performance while making steady progress on our strategic initiatives, said Jeffrey W. Martin, chairman and CEO of Sempra.
• We remain committed to our disciplined growth strategy, which centers on delivering safer and more reliable energy to the nearly 40 million consumers we serve.
• These value creation initiatives aim to increase long-term value for shareholders, employees, customers and other stakeholders, said Martin.
• In the first quarter, we made steady progress against our plan of execution.
• As we extend this work across 2025, we expect to advance the companys ability to deliver improved earnings growth and drive enhanced benefits for consumers and communities across our service territories.

Industry Context

The announcement highlights the increasing demand for electricity in Texas and the growing importance of renewable natural gas in California, reflecting broader trends in the energy industry towards cleaner and more reliable energy sources.

Comparison to Industry Standards

• Sempra's growth in earnings per share is in line with other major utility companies such as NextEra Energy (NEE) and Duke Energy (DUK).
• The capital expenditure plan of Oncor is comparable to investments being made by other large transmission and distribution companies like American Electric Power (AEP) to modernize their infrastructure.
• The focus on LNG projects aligns with the global demand for cleaner energy, similar to efforts by companies like Cheniere Energy (LNG) and Tellurian (TELL).

Stakeholder Impact

• Shareholders can expect continued growth and value creation through strategic initiatives and improved financial performance.
• Customers will benefit from safer, more reliable, and cleaner energy solutions.
• Employees will have opportunities for growth and development within a high-performance culture.
• Communities will benefit from enhanced energy infrastructure and sustainable business practices.

Next Steps

• Oncor continues to prepare for a comprehensive base rate proceeding utilizing a test year of calendar year 2024, with filing currently targeted for the second quarter of 2025.
• A final decision from the CPUC is expected by the end of the year regarding SDGE and SoCalGas applications to update their costs of capital with the CPUC for the period of 2026 to 2028.
• Sempra Infrastructure is targeting the sales of Ecogas Mxico, S. de R.L. de C.V., the owner of three utility franchises providing natural gas distribution services in Mexico, as well as a minority stake in Sempra Infrastructure Partners (SI Partners).
• More details on the progress of these items will be shared in the second quarter earnings call.

Key Dates

Keywords

Sempra, earnings, Oncor, infrastructure, LNG, guidance, utilities, Texas, California, ERCOT