Sempra(SRE) - 2024 Q1 - Quarterly Results

Sempra First-Quarter 2024 Financial Performance Sempra reported a year-over-year decline in both GAAP and adjusted earnings for Q1 2024, primarily due to foreign currency impacts, inflation in Mexico, and net unrealized derivative losses First-Quarter 2024 Results Sempra's Q1 2024 GAAP earnings decreased to $801 million from $969 million, with adjusted earnings also falling to $854 million from $922 million, impacted by foreign currency and derivative losses Q1 2024 vs. Q1 2023 Earnings Comparison (in millions) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | GAAP Earnings | $801 | $969 | | GAAP EPS (Diluted) | $1.26 | $1.53 | | Adjusted Earnings | $854 | $922 | | Adjusted EPS (Diluted) | $1.34 | $1.46 | Reconciliation of Q1 2024 GAAP to Adjusted Earnings (in millions) | Description | Amount | | :--- | :--- | | GAAP Earnings | $801 | | Impact from foreign currency and inflation in Mexico | $41 | | Net unrealized losses on derivatives | $12 | | Adjusted Earnings | $854 | - Management highlights strong economic growth in core markets and an infrastructure-centered strategy to modernize the energy grid, positioning the company to meet customer needs driven by renewables, EVs, and digital infrastructure[3] Earnings Guidance Sempra updated its full-year 2024 GAAP EPS guidance while affirming its adjusted EPS guidance for 2024, 2025, and its long-term EPS growth rate projection Full-Year EPS Guidance | Guidance Metric | 2024 Range | 2025 Range | | :--- | :--- | :--- | | GAAP EPS (Updated) | $4.52 - $4.82 | N/A | | Adjusted EPS (Affirmed) | $4.60 - $4.90 | N/A | | EPS (Affirmed) | N/A | $4.90 - $5.25 | - The company affirmed its projected long-term EPS growth rate of 6% to 8%[16] Business Segment Operations and Highlights Sempra's segments are advancing clean energy, expanding infrastructure, and progressing major LNG projects, reflecting strategic capital investments and market growth Sempra California Sempra California is pursuing hydrogen blending and EV charging infrastructure, with a proposed decision on its general rate cases expected in Q2 2024, impacting current revenue recording - Filed an application with the CPUC to develop projects demonstrating hydrogen blending in the natural gas system to support state decarbonization goals[6] - San Diego Gas & Electric Co. installed charging infrastructure for medium- to heavy-duty electric freight trucks at the U.S.-Mexico border[7] - A proposed decision on general rate cases is anticipated in Q2 2024, with a final decision expected by year-end, and Q1 2024 revenues were recorded based on 2023 authorized levels[9] Sempra Texas Sempra Texas, through Oncor, is experiencing significant economic expansion driven by digital infrastructure, filing a nearly $3 billion system resiliency plan, and seeing a 20% increase in interconnection requests - Oncor filed a system resiliency plan for nearly $3 billion in strategic capital investments over three years, focusing on grid modernization, cyber threat prevention, and wildfire mitigation[11] - Active generation and large commercial/industrial transmission point-of-interconnection (POI) requests in queue increased by 20% YoY to 781 at the end of Q1 2024[12] Sempra Infrastructure Sempra Infrastructure is progressing major LNG projects, with Energía Costa Azul LNG Phase 1 over 80% complete, and has reached a final investment decision on the Cimarrón wind project - Construction of Energía Costa Azul LNG Phase 1 is over 80% complete and is on track for commercial operations in summer 2025, with Port Arthur LNG Phase 1 construction also remaining on schedule[14] - A positive final investment decision was made for the Cimarrón wind project, with an estimated total capital expenditure of $550 million, and the project is expected to generate energy in late 2025[15] Detailed Financial Statements Sempra's Q1 2024 financial statements show a significant revenue decrease, asset growth driven by property, plant, and equipment, and increased cash from financing activities Consolidated Statements of Operations Sempra's Q1 2024 total revenues significantly decreased to $3.64 billion from $6.56 billion, leading to a net income decline to $881 million from $1.17 billion year-over-year Q1 2024 Income Statement Highlights (in millions) | Account | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenues | $3,640 | $6,560 | | Income before income taxes | $705 | $1,329 | | Net Income | $881 | $1,172 | | Earnings Attributable to Common Shares | $801 | $969 | Consolidated Balance Sheets As of March 31, 2024, Sempra's total assets increased to $89.6 billion from $87.2 billion, driven by property, plant, and equipment, while total liabilities also rose due to long-term debt Balance Sheet Summary (in millions) | Account | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $5,640 | $5,470 | | Property, plant and equipment, net | $56,318 | $54,960 | | Total Assets | $89,604 | $87,181 | | Total Current Liabilities | $9,064 | $10,090 | | Long-term debt and finance leases | $29,519 | $27,759 | | Total Liabilities | $54,943 | $53,527 | | Total Equity | $34,661 | $33,654 | Consolidated Statements of Cash Flows In Q1 2024, net cash from operating activities was $1.85 billion, with net cash used in investing activities increasing to $2.11 billion, and net cash from financing activities at $700 million Q1 2024 Cash Flow Summary (in millions) | Cash Flow Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,851 | $1,980 | | Net Cash used in Investing Activities | ($2,107) | ($1,895) | | Net Cash from Financing Activities | $700 | $151 | | Increase in Cash | $445 | $241 | Segment Performance In Q1 2024, Sempra California remained the largest earnings contributor at $582 million, Sempra Texas Utilities saw a significant increase to $183 million, and capital expenditures were highest in Sempra California Q1 Earnings Attributable to Common Shares by Segment (in millions) | Segment | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Sempra California | $582 | $618 | | Sempra Texas Utilities | $183 | $83 | | Sempra Infrastructure | $131 | $315 | | Parent and other | ($95) | ($47) | | Total | $801 | $969 | Q1 Capital Expenditures and Investments by Segment (in millions) | Segment | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Sempra California | $1,143 | $1,082 | | Sempra Texas Utilities | $193 | $85 | | Sempra Infrastructure | $790 | $744 | | Total | $2,126 | $1,915 | Operating Statistics In Q1 2024, Sempra California experienced decreased gas and electric deliveries, while Oncor in Texas saw increased electric deliveries, with both segments growing their customer bases - Sempra California's total gas deliveries decreased to 264 Bcf in Q1 2024 from 294 Bcf in Q1 2023[46] - Oncor's total electric deliveries increased to 37,313 million kWhs in Q1 2024 from 34,779 million kWhs in Q1 2023[46] - Customer meter counts grew across key segments, with Sempra California's total gas and electric meters and Oncor's electric meters all increasing year-over-year[46]