Sempra(US:SRE)2023-11-03 19:01Financial Data and Key Metrics Changes - The company reported third quarter 2023 GAAP earnings of $721 million or $1.14 per share, compared to $485 million or $0.77 per share in the same quarter of 2022 [39] - Adjusted earnings for the third quarter 2023 were $685 million or $1.08 per share, up from $622 million or $0.98 per share in the third quarter of 2022 [39] - Year-to-date 2023 adjusted earnings per share reached $3.48, with expectations to be at or above the high end of the 2023 adjusted EPS guidance range [24][39] Business Line Data and Key Metrics Changes - At Sempra Texas, there was a $49 million increase in equity earnings driven by weather-related consumption, new base rates, and customer growth [40] - Sempra Infrastructure saw a $21 million decrease in net interest expense due to higher capitalization of interest on projects under construction [40] - Oncor connected around 20,000 additional premises and managed a 34% increase in active transmission interconnection requests compared to last year [14][26] Market Data and Key Metrics Changes - Foreign direct investment in North America rose sharply by approximately 40% over the prior year, with Mexico surpassing China as America's largest trading partner [11] - The load demand in the Permian Basin is projected to increase from 4.2 gigawatts to roughly 17.2 gigawatts over the next decade [16] Company Strategy and Development Direction - The company aims to build North America's premier energy infrastructure, focusing on attractive markets with strong economic growth and constructive regulation [1] - The five-year capital plan is expected to increase by 10% to 20%, primarily driven by regulated utility investments, especially in Texas [55][133] - The company is pursuing innovative technologies, including utility-owned energy storage, to enhance reliability and support the energy transition [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities in Texas, highlighting the state's pro-business climate and diversified job creation [57][59] - The company anticipates significant growth in multiple areas of Oncor's service territory, supported by new legislation aimed at improving grid resiliency [59][66] - Management reaffirmed the long-term EPS growth rate of 6% to 8%, emphasizing the company's ability to deliver competitive returns [55][147] Other Important Information - The company is considering resegmentation of its California operations to simplify its business model, which may enhance operational efficiency [72][127] - The company has received regulatory approvals for key projects, including Port Arthur LNG Phase 2, which is expected to double the total capacity of the facility [68][70] Q&A Session Summary Question: What are the sources of funding for the increased CapEx? - Management indicated that they would consider all financing options, including common equity, to support the anticipated 10% to 20% increase in the capital plan [46][47] Question: What factors could dictate the range of CapEx increase? - Management noted that the final decisions regarding the capital plan would be made in consultation with the Oncor Board, with expectations of significant increases based on current growth trends [48][49] Question: How does the company view its LNG strategy? - Management expressed confidence in the LNG strategy, highlighting progress in development projects and the potential for significant commercial opportunities [52][54] Question: What is the goal of the resegmentation in California? - The resegmentation aims to simplify the business structure and improve operational efficiency, while still providing detailed financial information for individual segments [127][137] Question: How does the company plan to manage regulatory lag? - Management emphasized the importance of legislative changes that reduce regulatory lag, which will support earnings growth as the rate base expands [120][143]