Sign in
S

SEMPRA (SRE)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 adjusted EPS was $0.89, flat year over year and a modest beat versus consensus $0.85; GAAP EPS was $0.71, down year over year due to FX/inflation impacts in Mexico and discrete tax items . Results vs estimates: EPS $0.89 vs $0.85*, Revenue $3.00B vs $3.12B*, EBITDA $1.206B vs $1.396B* (small EPS beat, revenue and EBITDA misses; see Estimates Context). Values retrieved from S&P Global.
  • Total revenue was $3.00B, down 0.4% YoY and down 21% sequentially versus Q1 seasonality; segment earnings: California $259M, Texas $208M, Infrastructure $72M .
  • Guidance: GAAP EPS updated to $4.05–$4.45 (from $4.25–$4.65 in Q1); adjusted EPS affirmed at $4.30–$4.70; 2026 EPS affirmed at $4.80–$5.30; long-term EPS CAGR 7–9% targeted at the high end or above .
  • Catalysts: Texas Unified Tracker Mechanism (HB 5247) passed, expected to improve Oncor earned ROE by ~50–100 bps over time; Oncor filed a comprehensive base rate review; LNG progress (DOE non‑FTA authorization for Port Arthur Phase 2; HOA/SPAs with JERA) supports Infrastructure momentum and potential FID in 2025 .

What Went Well and What Went Wrong

What Went Well

  • “We are pleased to report another solid quarter,” with adjusted earnings up YoY YTD ($1.525B H1 2025 vs $1.421B H1 2024) and adjusted EPS guidance affirmed; management reiterated rotation to a more utility‑centric model .
  • Texas regulatory wins: HB 5247 (UTM) enacted, allowing interim rate adjustments to reduce regulatory lag; management expects Oncor’s earned ROE to increase 50–100 bps over time as capital is deployed under the UTM .
  • LNG momentum: Port Arthur Phase 2 received DOE non‑FTA export authorization (13.5 mtpa) and executed a 20‑year SPA framework with JERA for 1.5 mtpa; Phase 1 construction surpassing 50% complete, with Train 1/2 CODs targeted for 2027/2028 .

What Went Wrong

  • GAAP EPS declined to $0.71 from $1.12 YoY, driven by $97M FX/inflation impacts in Mexico and $26M tax expense related to holding Ecogas for sale; revenue modestly missed consensus and fell QoQ with typical seasonality . EPS/Revenue consensus values retrieved from S&P Global*.
  • Sempra Infrastructure segment earnings fell sharply YoY ($72M vs $291M), reflecting lower equity earnings/non‑controlling interests and mixed commodity/derivative marks despite stronger volumes; EBITDA missed consensus . EBITDA consensus values retrieved from S&P Global*.
  • California affordability and cost pressures: lower CPUC base operating margin and lower authorized cost of capital contributed to segment variance; management is executing Fit‑for‑2025 to offset O&M and improve productivity .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Total Revenue ($USD Billions)$3.011 $3.802 $3.000
GAAP EPS (Diluted)$1.12 $1.39 $0.71
Adjusted EPS (Diluted)$0.89 $1.44 $0.89
Net Income ($USD Millions)$871 N/A$519

Segment Earnings and Revenues

SegmentRevenues Q2 2024 ($MM)Revenues Q1 2025 ($MM)Revenues Q2 2025 ($MM)Earnings Q2 2024 ($MM)Earnings Q1 2025 ($MM)Earnings Q2 2025 ($MM)
Sempra California$2,625 $3,401 $2,490 $316 $724 $259
Sempra Texas UtilitiesN/A$426 $530 $202 $146 $208
Sempra Infrastructure$409 $519 $530 $291 $146 $72
Consolidating Adj., Parent & Other$(23) $(25) $(20) $(96) $(110) $(78)
Total$3,011 $3,802 $3,000 $713 $906 $461

Non‑GAAP Adjustments (Q2 2025, after‑tax)

ItemAmount ($MM)
Regulatory disallowances (COVID‑19 costs at Sempra California)$(25)
FX/inflation on monetary positions in Mexico$(97)
Net unrealized gains on commodity derivatives$25
Net unrealized gains on interest rate swaps (PA LNG Phase 1)$1
Tax item related to assets held for sale (Ecogas)$(26)

KPIs and Operating Statistics

KPIQ2 2024Q2 2025
SDGE Electric Total Deliveries (millions kWh)3,553 3,714
SDGE Electric Sales (millions kWh)661 610
Sempra California Gas Total Deliveries (Bcf)198 189
Oncor Total Deliveries (millions kWh)40,343 42,226
Oncor Electric Customer Meters (thousands)4,008 4,084

Balance Sheet Highlights (as of June 30, 2025)

MetricDec 31, 2024Jun 30, 2025
Cash & Cash Equivalents ($MM)$1,565 $155
Total Assets ($MM)$96,155 $99,907
Long‑term Debt & Finance Leases ($MM)$31,558 $34,936
Sempra Shareholders’ Equity ($MM)$31,222 $31,697

Cash Flow (Six Months Ended June 30)

Metric ($MM)H1 2024H1 2025
Cash from Operations$2,520 $2,266
Capex (Property, Plant & Equipment)$(3,830) $(4,640)
Net Cash (Financing)$1,618 $1,891

Guidance Changes

MetricPeriodPrevious Guidance (Q1 2025)Current Guidance (Q2 2025)Change
GAAP EPSFY 2025$4.25–$4.65 $4.05–$4.45 Lowered (reflects H1 actuals)
Adjusted EPSFY 2025$4.30–$4.70 $4.30–$4.70 Maintained
EPSFY 2026$4.80–$5.30 $4.80–$5.30 Maintained
LT EPS CAGR2025–20297–9% (high‑end or above) 7–9% (high‑end or above) Maintained
Diluted Shares (Guidance basis, mm)FY 2025654 654 Maintained

Reconciliation of Adjusted to GAAP EPS Guidance (FY 2025)

Excluded ItemPer‑Share Impact
Regulatory disallowances$0.04
FX/inflation (Mexico)$0.14
Net unrealized losses on commodity derivatives$0.02
Net unrealized losses on interest rate swaps (PA LNG)$0.01
Tax items (assets held for sale)$0.04

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Current Period (Q2 2025)Trend
Texas UTM/RegulatoryMonitoring legislative session; highlighted potential UTM benefits to reduce regulatory lag and improve credit quality HB 5247 enacted; Oncor commenced UTM use; expected 50–100 bps uplift in earned ROE over time; initial UTM filing expected 2026 Constructive, execution underway
Oncor Base Rate ReviewAnticipated filing in Q2 Filed comprehensive base rate review (final order expected Q1 2026); requested 45% equity layer; 10.55% ROE; updated O&M for 2024 Progressing through regulatory process
Texas Growth/Data CentersLC&I queue growth; ERCOT 765kV backbone plan; ~$32–$35B statewide transmission investments Active POIs up ~40% YoY; >1,120 active POIs; high‑confidence load 38 GW by 2031; data centers ~186 GW in queue Accelerating demand; permits/CCNs scaling
California Affordability/WildfireCost of capital filings; Fit‑for‑2025; climate credits; AB1054 framework viewed constructively $300M cost‑saving program proposed; SDGE awarded ~$600M of CAISO transmission projects; continued AB1054 engagement and fund replenishment discussions Mixed affordability pressures; regulatory progress
LNG Portfolio (ECA, Port Arthur)ECA Phase 1 ~92% complete; PA Phase 1 construction on track; PA Phase 2 targeting FID in 2025 DOE non‑FTA authorization for PA Phase 2; HOA/SPAs with JERA; PA Phase 1 >50% complete; FID for Phase 2 still targeted in 2025 Strengthening regulatory/commercial momentum

Management Commentary

  • “We remain focused on the disciplined execution of our value creation initiatives for 2025, with a view toward continuing to rotate capital into a more utility‑centric business model.” — CEO Jeffrey W. Martin .
  • “HB 5247… allows qualifying electric utilities… to record costs to a regulatory asset arising from eligible capital investments and apply for interim rate adjustments through an annual UTM filing… expected to help reduce regulatory investment lag and improve the earned ROE.” — CFO Karen Sedgwick .
  • “Port Arthur LNG Phase II… received… non‑FTA export authorization… and we executed a 20‑year SPA with JERA for 1.5 mtpa… remain focused on advancing commercial progress and financing… expecting to take FID in 2025.” — CFO Karen Sedgwick and CEO Jeffrey W. Martin .

Q&A Highlights

  • Sempra Infrastructure equity sale: LOI with KKR contemplates 15–30% stake; flexibility on size to optimize valuation, tax leakage, use of proceeds, and credit profile; deconsolidation and improved downgrade thresholds are being evaluated with rating agencies .
  • Matching proceeds to Texas CapEx: management aims to time transaction closings and proceeds to fund increased utility‑weighted capital plan, minimizing future common equity issuance .
  • Texas demand: Oncor reported >200 GW interconnection requests across data centers and industrials; high confidence load of ~38 GW by 2031; strong West Texas peaks; substantial CCN filings planned .
  • California wildfire/affordability: constructive engagement on AB1054 improvements; immediate bill savings prioritized (e.g., $300M program reduction; climate credits), while opposing shareholder‑funded solutions on principle .
  • Port Arthur Phase 2 feasibility: all major permits in hand, JERA offtake progress, financing advancing; still targeting 2025 FID .

Estimates Context

Metric (Q2 2025)ActualConsensusΔ vs Consensus
EPS (Diluted)$0.89 $0.85*+$0.04 — modest beat
Revenue ($USD Billions)$3.00 $3.12*−$0.12 — miss
EBITDA ($USD Billions)$1.206*$1.396*−$0.190 — miss

Note: Values with asterisk retrieved from S&P Global.

Estimate trajectory across recent quarters

MetricQ1 2025 ActualQ1 2025 ConsensusQ2 2025 ActualQ2 2025 Consensus
EPS (Diluted)$1.44 $1.317*$0.89 $0.849*
Revenue ($USD Billions)$3.802 $3.917*$3.000 $3.124*
EBITDA ($USD Billions)$1.622*$1.681*$1.206*$1.396*

Note: Values with asterisk retrieved from S&P Global.

Implications: Small EPS beat driven by disciplined cost execution and regulatory awards in California; revenue/EBITDA shortfalls reflect lower CPUC base margin, FX/inflation headwinds in Mexico, and derivative marks offsetting Infrastructure volumes .

Key Takeaways for Investors

  • Utility‑centric pivot accelerating: Texas legislative UTM and Oncor base rate review underpin earned ROE uplift and rate base growth; expect capital plan skew toward Texas through decade .
  • Near‑term Infrastructure volatility vs long‑term optionality: Q2 Infrastructure earnings down YoY, but DOE/SPA milestones at Port Arthur and ECA progress support future cash flow step‑ups; monitor 2025 Phase 2 FID .
  • Guidance quality: Adjusted EPS range maintained, GAAP EPS lowered to reflect H1 actuals and discrete items; long‑term EPS CAGR target at high end or above re‑affirmed .
  • Credit strategy: Equity sale at SI (15–30% or potentially above) and Ecogas divestiture designed to enhance credit and reduce reliance on common equity; potential deconsolidation of SI assessed with agencies .
  • California affordability execution: $300M program phase‑outs proposed, CAISO transmission awards to SDGE, Fit‑for‑2025 productivity/AI adoption — watch for 2026 cost of capital decisions .
  • Trading setup: Modest EPS beat vs revenue/EBITDA miss suggests limited near‑term estimate upgrades; stock narrative likely driven by Texas regulatory catalysts (UTM/base rate review timeline), LNG FID headline risk, and progress on capital recycling .
  • Medium‑term thesis: Regulated earnings mix trending toward ≥90% as transactions close; Texas demand tailwinds (data centers/LC&I), transmission CCNs, and UTM should support multi‑year EPS growth with improving earned returns .

Additional Detail and Cross-References

  • Condensed Statement of Operations and Reconciliation tables (EPS, Adjusted items): .
  • Segment financials and operating statistics: .
  • Guidance reconciliation (Adjusted to GAAP): .
  • Texas UTM legislation and Oncor base rate review details: .
  • LNG milestones: DOE non‑FTA permit and JERA HOA/SPAs: ; PA Phase 1 construction status: .
  • Q1 2025 baseline (for trend): EPS/segment/revenue: .