Core Viewpoint - Sempra Infrastructure has signed a non-binding heads of agreement with JERA for a 20-year LNG offtake agreement, indicating progress towards the Port Arthur LNG Phase 2 project, which aims to enhance U.S. natural gas exports to global markets [1][2]. Group 1: Project Details - The Port Arthur LNG Phase 2 project will have a capacity of 1.5 million tonnes per annum (Mtpa) and aims to double the total liquefaction capacity of the facility from approximately 13 Mtpa to about 26 Mtpa [1][3]. - The project has received all key permits and is actively marketed, with future phases in early development [2][3]. - The project has received authorization from the U.S. Department of Energy to export LNG to non-free trade agreement countries and from the Federal Energy Regulatory Commission [4]. Group 2: Strategic Partnerships - Sempra Infrastructure previously signed a non-binding agreement with Aramco for a long-term LNG offtake and equity investment in the Port Arthur LNG Phase 2 project [5]. - The collaboration with JERA, Japan's largest power generation company, is aimed at diversifying energy sources and enhancing energy supply resilience [2]. Group 3: Operational Timeline - The Port Arthur LNG Phase 1 project is under construction and is expected to achieve commercial operation in 2027 and 2028 for its two trains [6].

Core Viewpoint - Sempra Energy is enhancing its operational stability through systematic investments and expanding its LNG operations, although it faces risks related to valuation and wildfire events [1]. Group 1: Investment Plans and Growth - Sempra Energy has a capital investment plan of $56 billion for 2025-2029 aimed at strengthening infrastructure and improving service efficiency, with an expected annual rate base growth of 10% during this period [2]. - In 2025, the company plans to invest $13 billion, primarily for transmission and distribution enhancements and the development of LNG projects [3]. Group 2: Renewable Energy Initiatives - The company is investing in renewable energy to qualify for financial and environmental incentives, including the Cimarrón Wind project in Baja California, Mexico, which is expected to begin commercial operations in the first half of 2026 [4]. Group 3: Stock Performance and Valuation Concerns - Sempra Energy's trailing 12-month EV/Sales ratio is 6.22, higher than the industry average of 4.83, raising concerns among investors [5]. - Over the past month, Sempra Energy's shares have increased by 4.3%, outperforming the industry's growth of 0.7% [7]. Group 4: Risks from Wildfires - Recent wildfires in California have posed risks to Sempra Energy's infrastructure, potentially leading to power outages and significant losses [6].

Financial Performance - Net income for Q1 2025 was $974 million, a decrease from $984 million in Q1 2024, representing a 1% decline[20] - Comprehensive income for Q1 2025 was $941 million, compared to $1,035 million in Q1 2024, indicating a 9% decrease[20] - The company reported a net income of $917 million attributable to Sempra shareholders in Q1 2025, down from $812 million in Q1 2024, a decline of 13%[20] - The total comprehensive income for Sempra shareholders in Q1 2025 was $919 million, down from $881 million in Q1 2024, a decline of 4%[20] - Total operating revenues for San Diego Gas & Electric Company increased to $1,420 million in Q1 2025, up from $1,379 million in Q1 2024, representing a growth of 3%[31] - Net income attributable to common shares rose to $281 million in Q1 2025, compared to $223 million in Q1 2024, reflecting a year-over-year increase of 26%[31] - Operating income improved to $390 million in Q1 2025, up from $357 million in Q1 2024, marking an increase of 9%[31] - Total revenues for the three months ended March 31, 2025, were $3,802 million, a decrease of 20% compared to $3,640 million for the same period in 2024[105] - Utilities revenue for the three months ended March 31, 2025, was $3,483 million, down from $3,503 million in 2024, reflecting a decrease of 0.6%[105] Comprehensive Income and Loss - Other comprehensive loss for Q1 2025 totaled $34 million, while in Q1 2024, it was a gain of $161 million, reflecting a significant shift[20] - Total other comprehensive income for Q1 2024 was $46 million, contrasting with a loss of $29 million in Q1 2025, highlighting volatility in financial instruments[20] - The company’s comprehensive income attributable to noncontrolling interests was $2 million in Q1 2025, compared to $69 million in Q1 2024, a decrease of 97%[20] Assets and Liabilities - Total assets increased to $99,010 million as of March 31, 2025, up from $96,155 million at December 31, 2024, representing a growth of 2%[22] - Total current liabilities increased to $9,934 million as of March 31, 2025, from $9,676 million at December 31, 2024, indicating a rise of 2.7%[24] - Long-term debt and finance leases increased to $33,286 million as of March 31, 2025, from $31,558 million at December 31, 2024, reflecting a growth of 5.5%[24] - Total equity rose to $38,202 million as of March 31, 2025, compared to $37,788 million at December 31, 2024, an increase of 1.1%[25] Cash Flow and Operating Activities - Net cash provided by operating activities was $1,482 million for the three months ended March 31, 2025, down from $1,851 million in 2024, a decrease of 19.9%[26] - Cash and cash equivalents rose to $1,739 million as of March 31, 2025, compared to $1,565 million at December 31, 2024, marking an increase of 11.1%[22] - Cash and cash equivalents reached $607 million by March 31, 2025, compared to $293 million in the same period last year, showing a substantial increase of 107%[38] Expenditures and Investments - Expenditures for property, plant, and equipment were $2,336 million for the three months ended March 31, 2025, compared to $1,933 million in the same period of 2024, an increase of 20.9%[26] - Expenditures for property, plant, and equipment were $539 million in Q1 2025, compared to $624 million in Q1 2024, reflecting a decrease of 13.6%[38] - The company reported a decrease in accrued compensation and benefits to $398 million as of March 31, 2025, down from $558 million at December 31, 2024, a decline of 28.8%[24] Tax Expenses - The net income tax expense for Q1 2025 was $57 million, compared to a tax benefit of $172 million in Q1 2024, indicating a significant change in tax position[20] - Sempra's income tax expense for Q1 2025 was $57 million, significantly lower than $172 million in Q1 2024, resulting in an effective tax rate of 7% compared to 21%[97] - SDG&E's income tax expense decreased to $14 million in Q1 2025 from $40 million in Q1 2024, with an effective tax rate dropping from 15% to 5%[97] - SoCalGas reported an income tax expense of $38 million in Q1 2025, down from $43 million in Q1 2024, with an effective tax rate of 8% compared to 11%[97] Debt and Financing - Sempra had an aggregate capacity of $9.9 billion under seven primary committed lines of credit, with available unused credit of $8.405 billion[142] - At March 31, 2025, Sempra's weighted-average interest rate on short-term debt was 5.02%, slightly down from 5.03% at December 31, 2024[149] - SDG&E issued $850 million in first mortgage bonds at a 5.40% interest rate, with proceeds intended for general corporate purposes, including repayment of commercial paper[150] - Port Arthur LNG has a seven-year term loan facility of approximately $6.8 billion, with $1.2 billion outstanding at March 31, 2025, at a weighted-average interest rate of 5.33%[152] Derivatives and Risk Management - The total fair value of Sempra's derivatives designated as hedging instruments included $6 million in current assets and $24 million in other long-term assets as of March 31, 2025[171] - Sempra reported a pretax loss of $72 million on undesignated derivatives for the three months ended March 31, 2025, compared to a gain of $50 million for the same period in 2024[177] - Credit risk related contingent features may reduce Sempra's credit limit if credit ratings fall below investment grade, potentially leading to immediate payment requests from counterparties[178] Shareholder Equity and EPS - Basic EPS for Q1 2025 was $1.39, an increase from $1.27 in Q1 2024, with diluted EPS also at $1.39 compared to $1.26 in the prior year[208] - The weighted-average common shares outstanding for basic EPS increased to 651,992 in Q1 2025 from 632,821 in Q1 2024[208] - The company granted 303,614 nonqualified stock options and 601,483 performance-based RSUs in Q1 2025[210]

Sempra (NYSE:SRE) Q1 2025 Earnings Conference Call May 8, 2025 12:00 PM ET Company Participants Glen Donovan - SVP, Finance Jeff Martin - Chairman and CEO Karen Sedgwick - EVP and CFO Allen Nye - CEO, Oncor Caroline Winn - CEO of SDG&E Conference Call Participants Ross Fowler - Bank of America Carly Davenport - Goldman Sachs Steve Fleishman - Wolfe Research Nicholas Campanella - Barclays Julien Dumoulin-Smith - Jefferies Durgesh Chopra - Evercore ISI Anthony Crowdell - Mizuho David Arcaro - Morgan Stanley ...

Financial Data and Key Metrics Changes - The company reported Q1 2025 adjusted EPS of $1.44, an increase from $1.34 in the prior period [6][28] - Full year 2025 adjusted EPS guidance remains at $4.3 to $4.7, with 2026 EPS guidance of $4.8 to $5.3 [6] - Q1 2025 GAAP earnings were $942 million or $1.44 per share, compared to $854 million or $1.34 per share in Q1 2024 [28][29] Business Line Data and Key Metrics Changes - Sempra California contributed $88 million from higher CPUC-based operating margin, while Sempra Texas saw a decrease of $37 million in equity earnings due to higher interest and operating expenses [29] - Sempra Infrastructure reported a slight decrease of $2 million, primarily due to lower asset optimization [29] Market Data and Key Metrics Changes - In Texas, ERCOT projected peak load growth to increase to 150 gigawatts by 2030, prompting a regional transmission plan with investments estimated between $32 billion and $35 billion [13][14] - The company is well-positioned to construct a significant portion of the required transmission infrastructure in Texas [14] Company Strategy and Development Direction - The company plans to invest approximately $13 billion in energy infrastructure in 2025, with over $10 billion targeted for U.S. Utilities [8] - Initiatives include selling non-core assets and recycling capital to finance future growth, with a focus on improving regulatory compact in Texas and California [9][10] - The "Fit for 2025" campaign aims to reduce the company's cost structure and improve productivity through technology adoption, including artificial intelligence [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth opportunities and the importance of executing well in the near term [11][12] - The company is focused on delivering safe and reliable energy while enhancing affordability for customers [11][21] Other Important Information - The CPUC approved an expansion of West Side Canal battery storage, adding 100 megawatts of capacity [19] - The company is actively monitoring tariff impacts and has taken steps to mitigate risks associated with supply chain disruptions [62] Q&A Session Summary Question: Update on the SiP process and timeline - Management clarified the timeline for KKR's offer and subsequent responses, indicating an update will be provided in the Q2 call [35][36] Question: Texas growth and transmission projects - Management highlighted significant growth metrics in Texas, including a 3% increase in premise growth and a 66% increase in new transmission requests [40][41] Question: Specifics on the Fit for 2025 program - Management discussed initiatives to improve cost structure and customer service, including voluntary retirement programs and technology investments [46][48] Question: LNG project development and macroeconomic uncertainties - Management reassured that Port Arthur Phase II is on track, with strong commercial interest and ongoing development [57][60] Question: Tariff exposure and capital plan - Management indicated that tariff impacts are manageable, with most equipment sourced domestically, limiting exposure to around 2% or 3% [62][63] Question: Unified Tracker Bill in Texas - Management discussed the potential benefits of the Unified Tracker Bill and its interaction with rate case filings [69][72] Question: Wildfire fund changes in California - Management expressed optimism about potential changes to wildfire fund legislation and its implications for risk management [75][78]

Financial Data and Key Metrics Changes - The company reported Q1 2025 adjusted EPS of $1.44, an increase from $1.34 in the prior period, affirming full year 2025 adjusted EPS guidance of $4.3 to $4.7 and 2026 EPS guidance of $4.8 to $5.3 [5][27] - Q1 2025 GAAP earnings were $942 million or $1.44 per share, compared to $854 million or $1.34 per share in Q1 2024 [27][28] Business Line Data and Key Metrics Changes - Sempra California contributed $88 million from higher CPUC-based operating margin, while Sempra Texas saw a decrease of $37 million in equity earnings due to higher interest and operating expenses [28] - Sempra Infrastructure reported a slight decrease of $2 million, primarily due to lower asset optimization [28] Market Data and Key Metrics Changes - In Texas, ERCOT projected peak load growth to increase to 150 gigawatts by 2030, with significant investments proposed for the transmission grid totaling between $32 billion and $35 billion [12][13] - The legislative session in Texas is being monitored for potential beneficial impacts on the regulatory framework supporting transmission and distribution investments [14] Company Strategy and Development Direction - The company plans to invest approximately $13 billion in energy infrastructure in 2025, with over $10 billion targeted for U.S. Utilities [6] - The strategy includes selling non-core assets and recycling capital to finance future growth, with a focus on improving the regulatory compact in Texas and California [6][7] - The "Fit for 2025" campaign aims to reduce the company's cost structure and improve productivity through technology adoption, including artificial intelligence [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth opportunities and the importance of executing well in the near term to strengthen the company's value [10][11] - The management team is focused on delivering strategic initiatives that support consistent growth in earnings and cash flows [30] Other Important Information - The CPUC approved an expansion of West Side Canal battery storage, adding 100 megawatts of energy storage capacity [17] - The company is actively monitoring tariff impacts and has taken steps to mitigate risks by diversifying supplier sources and increasing domestic sourcing [60][61] Q&A Session Summary Question: Update on the SiP process and timeline - Management clarified the timeline for KKR's offer and subsequent responses, indicating an update will be provided in the Q2 call [34][36] Question: Insights on Texas growth and transmission projects - Management highlighted significant growth metrics in Texas, including a 3% increase in premise growth and a 66% increase in new transmission requests year-to-date [39][40] Question: Details on the Fit for 2025 program - Management discussed initiatives to improve cost structure and customer service, including voluntary retirement programs and technology investments [46][48] Question: LNG project development and macroeconomic uncertainties - Management reassured that Port Arthur Phase II is on track, emphasizing strong commercial interest and ongoing development progress [58][59] Question: Tariff exposure and capital plan impacts - Management indicated that tariff impacts are manageable, with most equipment sourced domestically, limiting direct impacts to around 2% or 3% of capital expenditures [60][62] Question: Unified Tracker Bill and its implications - Management discussed the potential benefits of the Unified Tracker Bill in Texas, which could streamline regulatory processes and improve credit quality [70][72] Question: Wildfire fund changes in California - Management expressed optimism about potential changes to wildfire fund legislation, emphasizing the importance of addressing wildfire risk for the company's operations [75][80]

Core Viewpoint - Sempra Energy reported strong first-quarter 2025 adjusted earnings per share (EPS) of $1.44, exceeding expectations and showing year-over-year growth [1] Financial Performance - Total revenues for Sempra Energy reached $3.80 billion, a 4.5% increase from $3.64 billion in the previous year, driven by higher contributions from Natural gas and Electric business units, although it fell short of the consensus estimate of $3.85 billion by 1.2% [2] - The company generated GAAP earnings of $1.39 per share, up from $1.26 in the first quarter of 2024 [1] Segmental Update - Sempra California reported quarterly earnings of $724 million, an increase from $582 million in the prior-year quarter [3] - Sempra Texas Utility saw a decline in earnings from $183 million to $146 million [3] - Sempra Infrastructure's earnings rose to $146 million from $131 million [3] - The Parent and Other segment reported a loss of $110 million, wider than the previous year's loss of $95 million [3] Financial Update - As of March 31, 2025, cash and cash equivalents totaled $1.74 billion, up from $1.57 billion at the end of 2024 [4] - Long-term debt and finance leases increased to $33.29 billion from $31.56 billion [4] - Cash flow from operating activities decreased from $1.85 billion in Q1 2024 to $1.48 billion in Q1 2025 [4] Guidance - Sempra Energy reaffirmed its 2025 adjusted EPS guidance of $4.30-$4.70, with the Zacks Consensus Estimate at $4.69 per share [5] - The company expects 2026 earnings to be in the range of $4.80-$5.30 per share, with the consensus estimate at $5.17 per share [5] - The long-term EPS growth rate is now expected to be at the high end or above the previously projected range of 7-9% through 2029 [6] Zacks Rank - Sempra currently holds a Zacks Rank of 4 (Sell) [7]

Financial Performance - Sempra reported Q1 2025 GAAP earnings of $906 million or $1.39 per diluted share, up from $801 million or $1.26 per diluted share in Q1 2024, representing a 13.1% increase in earnings [3]. - Adjusted earnings for Q1 2025 were $942 million or $1.44 per diluted share, compared to $854 million or $1.34 per diluted share in Q1 2024, reflecting a 10.3% increase [3]. - Total revenues for Q1 2025 increased to $3,802 million, up 4.4% from $3,640 million in Q1 2024 [32]. - Net income for Q1 2025 was $919 million, compared to $881 million in Q1 2024, reflecting a growth of 4.3% [32]. - Basic earnings per common share (EPS) rose to $1.39 in Q1 2025, up from $1.27 in Q1 2024, representing a 9.4% increase [32]. - Segment earnings attributable to common shares increased to $906 million in Q1 2025, up from $801 million in Q1 2024, reflecting a growth of 13.1% [47]. - Adjusted EPS guidance for 2025 is projected to be between $4.30 and $4.70, excluding significant items [38]. - Sempra updated its full-year 2025 GAAP EPS guidance to a range of $4.25 – $4.65, and affirmed its adjusted EPS guidance range of $4.30 to $4.70 [15]. Capital Expenditures and Investments - Oncor Electric Delivery Company is executing a $36.1 billion five-year capital plan to meet growing electricity demand in Texas, which reached a winter peak demand of 80.5 GW in February 2025 [7]. - Capital expenditures for property, plant, and equipment rose to $2,336 million in Q1 2025, compared to $1,933 million in Q1 2024, an increase of 20.9% [47]. - Expenditures for investments in Sempra Texas Utilities increased significantly to $486 million in Q1 2025 from $193 million in Q1 2024, a rise of 151.8% [47]. Assets and Liabilities - Total current assets increased to $5,665 million as of March 31, 2025, compared to $5,285 million at the end of 2024, marking a 7.2% increase [42]. - Total assets reached $99,010 million as of March 31, 2025, up from $96,155 million at the end of 2024, indicating a growth of 3.9% [42]. - Long-term debt and finance leases increased to $33,286 million as of March 31, 2025, compared to $31,558 million at the end of 2024 [44]. - Cash and cash equivalents rose to $1,739 million as of March 31, 2025, compared to $1,565 million at the end of 2024, an increase of 11.1% [42]. - Cash, cash equivalents, and restricted cash increased to $1,762 million as of March 31, 2025, compared to $834 million as of March 31, 2024, a growth of 111.5% [46]. Operational Metrics - Oncor had approximately 1,100 active transmission point of interconnection requests, a 35% increase compared to Q1 2024, and served nearly 19,000 additional premises in the first quarter [8]. - Total gas customer meters for Sempra California increased to 7,122 thousand in Q1 2025 from 7,089 thousand in Q1 2024, a growth of 0.5% [49]. - Total electric customer meters for Sempra California rose to 1,535 thousand in Q1 2025, up from 1,522 thousand in Q1 2024, an increase of 0.9% [49]. - Total deliveries of electric sales (millions of kWhs) decreased to 4,147 million in Q1 2025 from 4,104 million in Q1 2024, a slight decline of 1.0% [49]. Future Plans and Guidance - Sempra announced plans to sell Ecogas México and a minority stake in Sempra Infrastructure Partners, expected to be accretive to earnings per share over the next 12-18 months [20][21]. - The company is committed to a long-term EPS compound annual growth rate of 7% to 9% for the period from 2025 to 2029 [15]. Cash Flow and Financial Activities - Total cash provided by operating activities decreased to $1,482 million in Q1 2025 from $1,851 million in Q1 2024, a decline of 19.9% [46]. - Net cash used in investing activities increased to $2,785 million in Q1 2025 from $2,107 million in Q1 2024, reflecting a rise of 32.1% [46]. - The company reported a $35 million net unrealized loss on commodity derivatives for Q1 2025 [40]. - The company experienced a $8 million impact from foreign currency and inflation on its monetary positions in Mexico [40].

Sempra (SRE) came out with quarterly earnings of $1.44 per share, beating the Zacks Consensus Estimate of $1.21 per share. This compares to earnings of $1.34 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 19.01%. A quarter ago, it was expected that this natural gas and electricity provider would post earnings of $1.63 per share when it actually produced earnings of $1.50, delivering a surprise of -7.98%.Over the last four qua ...

Financial Performance - Q1 2025 adjusted EPS was $1.44, compared to $1.34 in Q1 2024[15] - The company is affirming FY 2025 adjusted EPS guidance range of $4.30 - $4.70[15] - The company is affirming FY 2026 EPS guidance range of $4.80 - $5.30[15] - The company is guiding to the high-end or above the projected EPS CAGR of 7% – 9% for 2025 through 2029[15] Strategic Initiatives - The company plans to invest $13 billion this year, prioritizing utility investments and improved returns[10] - The company initiated a process to sell a 15% – 30% minority interest in Sempra Infrastructure Partners[21] - The company initiated a process to sell Ecogas, a natural gas distribution utility in Northern Mexico[21] Business Updates - ERCOT set a new all-time winter peak demand of 80.5 GW[21] - SDGE and SoCalGas filed 2026 – 2028 cost of capital applications[21] - CA Climate Credit to reduce customers' bills in April by as much as $136 at SDGE and $87 at SoCalGas[21]