Summary
Sempra Energy (SRE) reported solid financial results for the nine months ended September 30, 2016. The company saw an increase in diluted earnings per share to $3.93 compared to $3.91 in the prior year period, driven by a significant non-cash gain from the remeasurement of an equity interest in Gasoductos de Chihuahua (GdC) and a gain on the sale of EnergySouth. However, the company also recorded a substantial impairment loss on assets held for sale at Termoeléctrica de Mexicali (TdM) and a significant loss on the permanent release of pipeline capacity within its Sempra Natural Gas segment. The Aliso Canyon natural gas leak continues to be a significant event, with SoCalGas incurring substantial costs, partially offset by insurance receivables, and facing ongoing regulatory scrutiny and litigation. The company's utility segments, SDG&E and SoCalGas, are navigating rate case decisions and safety regulations, which are impacting their near-term earnings. Overall, investors should note the impact of both significant positive (GdC remeasurement, EnergySouth sale) and negative (TdM impairment, pipeline capacity release, Aliso Canyon costs) non-recurring items on reported earnings. The core utility operations are demonstrating stable performance, but regulatory and operational challenges, particularly for SoCalGas, warrant close monitoring.
Financial Highlights
46 data points| Revenue | $2.54B |
| Interest Expense | $136.00M |
| Net Income | $622.00M |
| EPS (Basic) | $1.24 |
| EPS (Diluted) | $1.23 |
| Shares Outstanding (Basic) | 500.80M |
| Shares Outstanding (Diluted) | 504.80M |
Key Highlights
- 1Sempra Energy reported a 9-month diluted EPS of $3.93, a slight increase from $3.91 in the prior year, driven by a significant non-cash gain of $350 million from remeasuring its equity interest in Gasoductos de Chihuahua (GdC).
- 2The Sempra Natural Gas segment experienced a $123 million loss on the permanent release of pipeline capacity and a $27 million impairment on its investment in Rockies Express.
- 3SoCalGas incurred $763 million in estimated costs related to the Aliso Canyon natural gas leak, with $73 million reserved and $664 million recognized as an insurance receivable.
- 4SDG&E's electric revenues increased slightly year-over-year, but operation and maintenance expenses rose due to CPUC-authorized refundable programs and higher base operating margins.
- 5Sempra Mexico completed the acquisition of GdC for $1.144 billion and is also acquiring the Ventika wind power generation facilities for an estimated $852 million.
- 6The company recorded a $131 million impairment loss on assets held for sale at Termoeléctrica de Mexicali (TdM) within Sempra Mexico.
- 7Sempra Energy's consolidated cash provided by operating activities decreased by $398 million year-over-year, largely due to increased insurance receivables for the Aliso Canyon leak and lower net income.