Sempra(SRE) - 2025 Q2 - Quarterly Results

Executive Summary Sempra reported Q2 2025 GAAP earnings of $461 million, affirmed 2025 adjusted EPS, and advanced capital recycling Second-Quarter 2025 Financial Highlights Sempra's Q2 2025 financial performance showed decreased GAAP earnings but increased adjusted earnings year-over-year | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | GAAP Earnings | $461 million | $713 million | -$252 million | | GAAP Diluted EPS | $0.71 | $1.12 | -$0.41 | | Adjusted Earnings | $583 million | $567 million | +$16 million | | Adjusted Diluted EPS | $0.89 | $0.89 | No Change | - Jeffrey W. Martin, chairman and CEO of Sempra, expressed satisfaction with the solid quarter and continued focus on disciplined execution of value creation initiatives for 2025, aiming for a more utility-centric business model[4] Update on Value Creation Initiatives Sempra progressed on capital recycling, including planned equity sales in Sempra Infrastructure and Ecogas México - Sempra made steady progress on its five value creation initiatives for 2025, particularly its ongoing capital recycling program[7] - The company extended the right of first offer process and signed a non-binding letter of intent with KKR for the planned sale of equity at Sempra Infrastructure[7] - The sales process for Ecogas México, S. de R.L. de C.V. continues to advance with strong interest from strategic and financial buyers[7] - Both transactions (Sempra Infrastructure equity and Ecogas México sale) are expected to close in the second or third quarter of 2026[7] Earnings Guidance Sempra updated 2025 GAAP EPS guidance while affirming adjusted EPS and long-term growth projections | Guidance Metric | Range | Status | | :-------------- | :---- | :----- | | Full-year 2025 GAAP EPS | $4.05 to $4.45 | Updated (reflecting Q2 results) | | Full-year 2025 Adjusted EPS | $4.30 to $4.70 | Affirmed | | Full-year 2026 EPS | $4.80 to $5.30 | Affirmed | | Long-term EPS CAGR (2025-2029) | 7% to 9% | Affirmed (to high-end or above) | Consolidated Financial Statements This section details Sempra's condensed consolidated statements of operations, balance sheets, and cash flows Condensed Consolidated Statements of Operations Q2 2025 saw stable total revenues but a significant decrease in net income and diluted EPS year-over-year | Metric (Millions USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------- | :------- | | Total Revenues | $3,000 | $3,011 | $6,802 | $6,651 | | Income before income taxes and equity earnings | $298 | $308 | $949 | $1,013 | | Net income | $519 | $871 | $1,438 | $1,752 | | Earnings attributable to common shares | $461 | $713 | $1,367 | $1,514 | | Diluted EPS | $0.71 | $1.12 | $2.09 | $2.38 | - Total revenues remained stable year-over-year for Q2, while YTD revenues increased[26] - Net income and earnings attributable to common shares decreased significantly in Q2 2025 compared to Q2 2024[26] Condensed Consolidated Balance Sheets Total assets increased by $3.75 billion, driven by property, plant, and equipment, alongside rising long-term debt | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Current Assets | $4,169 | $5,285 | -$1,116 | | Total Other Assets | $30,936 | $29,433 | +$1,503 | | Property, plant and equipment, net | $64,802 | $61,437 | +$3,365 | | Total Assets | $99,907 | $96,155 | +$3,752 | | Total Current Liabilities | $8,607 | $9,676 | -$1,069 | | Long-term debt and finance leases | $34,936 | $31,558 | +$3,378 | | Total Liabilities and Equity | $99,907 | $96,155 | +$3,752 | | Sempra shareholders' equity | $31,697 | $31,222 | +$475 | - Total assets increased by $3.75 billion from December 31, 2024, primarily driven by an increase in property, plant and equipment, net, and other assets[37] - Long-term debt and finance leases increased by $3.38 billion, while total current liabilities decreased by $1.07 billion[39] Condensed Consolidated Statements of Cash Flows Operating cash flow decreased, while investing activities saw a substantial increase in cash used year-over-year | Metric (Millions USD) | YTD 2025 | YTD 2024 | Change | | :-------------------- | :------- | :------- | :----- | | Net cash provided by operating activities | $2,266 | $2,520 | -$254 | | Net cash used in investing activities | $(5,563) | $(4,168) | -$1,395 | | Net cash provided by financing activities | $1,891 | $1,618 | +$273 | | Decrease in cash, cash equivalents and restricted cash | $(1,406) | $(38) | -$1,368 | - Net cash provided by operating activities decreased by $254 million year-over-year for the six months ended June 30[41] - Investing activities saw a significant increase in cash used, primarily due to higher expenditures for property, plant and equipment ($4.64 billion in YTD 2025 vs. $3.83 billion in YTD 2024) and investments ($972 million vs. $387 million)[41] Segment Performance and Operations Sempra's segments, Sempra Texas, California, and Infrastructure, reported varied Q2 2025 performance and strategic advancements Sempra California Sempra California focused on grid modernization, strategic capital investments, and cost-saving initiatives for customers - Sempra California is a dual-utility platform focused on connecting roughly 25 million consumers to safe, reliable and affordable energy[11] - San Diego Gas & Electric Company (SDG&E) was awarded an estimated $600 million of projects in the California Independent System Operator's 2024-2025 Transmission Plan[11] - SDG&E and Southern California Gas Company (SoCalGas) invested over $1.2 billion of capital during the quarter to advance strategic programs and modernize energy networks[12] - SDG&E is executing initiatives to lower costs and improve productivity, including an effort to save customers nearly $300 million between 2026 and 2031 by phasing out certain non-economic regulatory programs[12] | Metric (Millions USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------- | :------- | | Earnings attributable to common shares | $259 | $316 | $983 | $898 | | Capital Expenditures for Property, Plant and Equipment | $1,221 | $1,069 | $2,315 | $2,212 | Sempra Texas Utilities (Oncor) Oncor benefited from new legislation, increased interconnection requests, and filed for a comprehensive base rate review - The state of Texas passed new legislation, including the Unified Tracker Mechanism (House Bill 5247), expected to reduce regulatory lag and improve earned returns on equity for qualifying utilities like Oncor[8] - Oncor Electric Delivery Company LLC (Oncor) had over 1,120 active transmission point of interconnection requests in queue, representing a nearly 40% increase compared to Q2 2024[9] - Oncor increased its premises served by almost 20,000 in Q2 and built, rebuilt or upgraded nearly 600 circuit miles of transmission and distribution power lines[9] - Oncor filed a request for a comprehensive base rate review with the Public Utility Commission of Texas, with a final order expected in Q1 2026[10] | Metric (Millions USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------- | :------- | | Earnings attributable to common shares | $208 | $202 | $354 | $385 | | Capital Expenditures for Investments | $485 | $192 | $971 | $385 | Sempra Infrastructure Sempra Infrastructure advanced major construction projects, secured LNG export authorization, and signed a 20-year LNG supply agreement - Sempra Infrastructure continued to make progress on five significant construction projects, including infrastructure projects on both the Pacific and Gulf Coasts of North America[13] - The Port Arthur LNG Phase 2 development project received its non-FTA export authorization from the U.S. Department of Energy, allowing export of up to approximately 13.5 Mtpa of U.S.-produced LNG[14] - Sempra Infrastructure executed a 20-year sale and purchase agreement with JERA Co. Inc. for the supply of 1.5 Mtpa of LNG offtake from Phase 2[14] - Sempra continues to target making a financial investment decision on Port Arthur LNG Phase 2 in 2025[14] | Metric (Millions USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------- | :------- | | Earnings attributable to common shares | $72 | $291 | $218 | $422 | | Capital Expenditures for Property, Plant and Equipment | $1,081 | $827 | $2,322 | $1,617 | Other Operating Statistics This section provides key operational metrics for Sempra California, Oncor, Ecogas, and Termoeléctrica de Mexicali | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------ | :------ | :------ | :------- | :------- | | Sempra California Gas sales (Bcf) | 75 | 78 | 191 | 200 | | Sempra California Total gas customer meters (thousands) | N/A | N/A | 7,135 | 7,098 | | Sempra California Electric sales (millions of kWhs) | 610 | 661 | 1,325 | 1,596 | | Sempra California Total electric customer meters (thousands) | N/A | N/A | 1,540 | 1,525 | | Oncor Total deliveries (millions of kWhs) | 42,226 | 40,343 | 81,232 | 77,656 | | Oncor Total electric customer meters (thousands) | N/A | N/A | 4,084 | 4,008 | | Ecogas Natural gas customer meters (thousands) | N/A | N/A | 166 | 160 | | Sempra Infrastructure Termoeléctrica de Mexicali (millions of kWhs) | 776 | 650 | 1,478 | 1,630 | - Oncor's total electric deliveries increased by 4.67% in Q2 2025 YoY and 4.61% YTD 2025 YoY, reflecting strong economic growth in Texas[45] Non-GAAP Financial Measures Sempra uses non-GAAP measures like adjusted earnings and EPS to clarify ongoing performance by excluding infrequent or volatile items Reconciliation of Adjusted Earnings to GAAP Earnings This section reconciles adjusted earnings to GAAP earnings by detailing specific excluded items and their financial impact - Adjusted earnings and EPS exclude items generally not related to ongoing business activities and/or infrequent in nature, such as regulatory disallowances, foreign currency and inflation impacts in Mexico, and net unrealized gains/losses on commodity and interest rate derivatives[28] | Excluded Item (Millions USD) | Q2 2025 Impact | YTD 2025 Impact | | :--------------------------- | :------------- | :-------------- | | Regulatory disallowances | $25 | $25 | | Foreign currency and inflation (Mexico) | $97 | $89 | | Net unrealized (gains) losses on commodity derivatives | $(25) | $10 | | Net unrealized (gains) losses on interest rate swaps (PA LNG Phase 1) | $(1) | $8 | | Tax items related to assets held for sale | $26 | $26 | Reconciliation of Adjusted EPS Guidance to GAAP EPS Guidance Sempra's 2025 adjusted EPS guidance excludes specific items to provide a consistent view of core business operations - Sempra's 2025 Adjusted EPS Guidance Range of $4.30 to $4.70 excludes specific items, similar to historical adjusted earnings, to provide a meaningful comparison of business operations[33] - This guidance does not contemplate the anticipated impacts of the proposed sale of Ecogas and the proposed sale of an equity interest in Sempra Infrastructure Partners, which combined, are expected to be accretive[33] | Excluded Item (EPS Impact) | Full-Year 2025 | | :------------------------- | :------------- | | Impact from regulatory disallowances | $0.04 | | Impact from foreign currency and inflation on monetary positions in Mexico | $0.14 | | Net unrealized losses on commodity derivatives | $0.02 | | Net unrealized losses on interest rate swaps related to PA LNG Phase 1 project | $0.01 | | Tax items related to assets held for sale | $0.04 | Additional Information This section provides general information about Sempra and important disclaimers regarding forward-looking statements and associated risks About Sempra Sempra is a leading North American energy infrastructure company serving nearly 40 million consumers across key markets - Sempra is a leading North American energy infrastructure company focused on delivering energy to nearly 40 million consumers[18] - The company owns one of the largest energy networks on the continent, electrifying and improving energy resilience in significant economic markets including California, Texas, Mexico, and global energy markets[18] - Sempra is recognized as a leader in sustainable business practices and for its high-performance culture, demonstrated by its inclusion in the Dow Jones Sustainability Index North America[18] Forward-Looking Statements This section outlines the inherent risks and uncertainties associated with Sempra's forward-looking statements and future results - The press release contains forward-looking statements based on assumptions about the future, involving risks and uncertainties, and are not guarantees[19] - Factors that could cause actual results to differ materially include California wildfires, regulatory actions, success of business development efforts, changes to capital expenditure plans, changes in trade and foreign policy, litigation, cybersecurity threats, capital resource availability, and climate policies[21] - Investors should not rely unduly on any forward-looking statements, and further risks are discussed in Sempra's reports filed with the U.S. Securities and Exchange Commission (SEC)[23]