Sempra Energy ((SRE)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Sempra Energy revealed a strong financial performance with strategic initiatives that promise future growth. The sentiment was positive, underscored by robust earnings and strategic asset sales, despite some regulatory hurdles and a decline in GAAP earnings due to tax expenses. The outlook remains optimistic, driven by growth in Texas and ongoing LNG projects.
Strong Adjusted EPS Growth
Sempra Energy reported a significant increase in its third quarter 2025 adjusted EPS, reaching $1.11 compared to $0.89 in the previous period. The company has reaffirmed its full-year 2025 adjusted EPS guidance range of $4.30 to $4.70, along with a 2026 guidance range of $4.80 to $5.30, indicating confidence in its financial trajectory.
Significant Capital Deployment
The company successfully deployed nearly $9 billion of capital in the first three quarters of 2025, positioning itself well to meet or exceed its year-end goal of $13 billion. This capital is primarily directed towards U.S. utilities, reflecting Sempra’s strategic focus on strengthening its core operations.
Sempra Infrastructure Stake Sale
In a strategic move, Sempra announced the sale of a 45% stake in Sempra Infrastructure Partners for $10 billion. This transaction is expected to contribute an average of $0.20 to EPS accretion over five years starting in 2027, highlighting the company’s focus on optimizing its asset portfolio.
Progress in LNG Projects
Sempra’s LNG projects are progressing well, with Port Arthur LNG Phase 1 on schedule and Train 1 expected to reach COD in 2027. Additionally, ECA LNG Phase 1 is over 95% complete, showcasing Sempra’s commitment to expanding its LNG footprint.
Oncor’s Capital Plan Increase
Oncor, a key subsidiary of Sempra, is set to increase its capital plan by over 30%, aiming for a target of $55 billion to $60 billion through 2030. This increase reflects strong market demand and operational advancements in Texas, a key growth area for the company.
GAAP Earnings Decline
Despite the positive developments, Sempra reported a decline in GAAP earnings for the third quarter of 2025, with earnings of $77 million or $0.12 per share, down from $638 million or $1 per share in the same period of 2024. This decline was primarily due to a $514 million tax expense related to Sempra Infrastructure Partners.
Regulatory Challenges in California
Sempra continues to face regulatory challenges in California, with several matters pending, including Track 2 of the GRC, the T06 proceeding at FERC, and the CPUC’s cost of capital proceeding. These challenges could impact the company’s operations and financial performance in the region.
Forward-Looking Guidance
Sempra provided detailed financial guidance during the call, emphasizing its strategic focus on capital allocation and operational efficiency. The company is on track to meet its investment goal of approximately $13 billion this year, with significant growth expected in Texas. The strategic sale of a 45% stake in Sempra Infrastructure Partners is anticipated to enhance EPS accretion over the next five years, starting in 2027.
In summary, Sempra Energy’s earnings call highlighted a positive outlook with strong financial performance and strategic initiatives aimed at fostering growth. Despite some regulatory challenges and a decline in GAAP earnings, the company’s strategic moves, particularly in Texas and LNG projects, position it well for future success.