Summary
Sempra Energy (SRE) reported a significant year-over-year decrease in earnings for the second quarter and first half of 2012. This decline was primarily driven by a substantial non-cash impairment charge related to its investment in Rockies Express and the absence of a significant remeasurement gain on equity method investments in South America that was recorded in the prior year's comparable period. Despite the overall earnings drop, the California Utilities (SDG&E and SoCalGas) demonstrated resilient performance, with SDG&E showing improved year-over-year earnings driven by factors like the Sunrise Powerlink project and wildfire insurance premium recovery. Sempra Natural Gas, however, experienced significant losses due to lower commodity prices, the end of a key power sales contract, and the aforementioned Rockies Express impairment. Management highlighted efforts to bolster liquidity through new credit facilities and noted continued capital investments across various segments, including renewable energy projects and utility infrastructure upgrades. The company is actively managing regulatory proceedings, including the crucial 2012 General Rate Case for its California Utilities, which will impact future revenue requirements. Additionally, significant attention is being paid to ongoing issues at the San Onofre Nuclear Generating Station (SONGS), which has resulted in extended outages and potential future costs and regulatory scrutiny.
Financial Highlights
47 data points| Revenue | $2.09B |
| Interest Expense | $113.00M |
| Net Income | $62.00M |
| EPS (Basic) | $0.13 |
| EPS (Diluted) | $0.13 |
| Shares Outstanding (Basic) | 482.20M |
| Shares Outstanding (Diluted) | 492.60M |
Key Highlights
- 1Total revenues decreased by 13.7% to $2.09 billion for the quarter and by 7.9% to $4.47 billion for the six months ended June 30, 2012, compared to the prior year periods.
- 2Net income attributable to Sempra Energy shareholders significantly decreased to $62 million ($0.25 per diluted share) for the quarter and $298 million ($1.21 per diluted share) for the six months, down from $503 million ($2.09 per diluted share) and $757 million ($3.14 per diluted share) respectively in the prior year.
- 3A major factor in the earnings decline was a $179 million after-tax non-cash impairment charge related to Sempra Natural Gas' investment in Rockies Express Pipeline LLC.
- 4SDG&E reported increased earnings, driven by improved performance from the Sunrise Powerlink project and recovery of incremental wildfire insurance premiums.
- 5SoCalGas experienced a slight decrease in earnings, primarily due to higher non-refundable operating expenses and depreciation, and a higher effective tax rate.
- 6Sempra Natural Gas posted substantial losses primarily due to lower commodity prices, the expiration of the DWR contract, and the Rockies Express impairment charge.
- 7The company refinanced its credit facilities in March 2012, extending maturities and increasing availability, with significant unused credit capacity available at quarter-end.