10-QPeriod: Q3 FY2023

SEMPRA Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 3, 2023For Securities:SRESREA

Summary

Sempra (SRE) reported solid financial results for the nine months ended September 30, 2023, with net income attributable to common shares increasing to $2.29 billion from $1.66 billion in the prior year, reflecting strong performance across its key segments, particularly Sempra Infrastructure and SoCalGas. The company demonstrated robust operating cash flows and managed its capital expenditures effectively, with a significant portion allocated to infrastructure improvements and growth projects. Sempra Infrastructure's earnings saw a substantial increase driven by asset and supply optimization, while SoCalGas's earnings recovered significantly due to the resolution of litigation and regulatory matters related to the Aliso Canyon leak, alongside favorable income tax benefits. SDG&E also showed a modest increase in earnings, supported by higher transmission margins and regulatory interest income. Looking ahead, Sempra continues to invest heavily in its energy infrastructure, with a significant capital expenditure plan focused on modernization and expansion. The company's credit ratings remain at investment grade, supported by strong liquidity and access to capital markets. Investors should monitor regulatory developments, particularly those impacting SDG&E and SoCalGas, and the ongoing large-scale infrastructure projects within Sempra Infrastructure.

Financial Highlights

46 data points
Beta

Revenue

$3.33B

Net Income

$721.00M

21.6% Net Margin

EPS (Diluted)

$1.14

Total Assets

$85.73B

Cash & Equivalents

$1.15B

Free Cash Flow

-$400.00M

Financial Statements
Beta
Revenue$3.33B
Interest Expense$312.00M
Net Income$721.00M
EPS (Basic)$1.14
EPS (Diluted)$1.14
Shares Outstanding (Basic)630.04M
Shares Outstanding (Diluted)632.32M

Key Highlights

  • 1Sempra reported a significant year-over-year increase in net income attributable to common shares, reaching $2.29 billion for the first nine months of 2023, up from $1.66 billion in the same period of 2022.
  • 2Sempra Infrastructure showed a substantial earnings increase, driven by asset optimization, favorable foreign currency impacts, and lower net interest expense.
  • 3SoCalGas's earnings rebounded from a loss in the prior year to a significant profit, primarily due to the resolution of Aliso Canyon litigation and regulatory matters, alongside positive income tax benefits.
  • 4SDG&E experienced a modest increase in earnings, supported by higher electric transmission margins and regulatory interest income, though partially offset by higher income tax expense.
  • 5Capital expenditures remain robust, with a total of $6.35 billion for the nine months ended September 30, 2023, primarily focused on infrastructure improvements and large-scale projects like the PA LNG Phase 1 project.
  • 6The company maintains strong liquidity with substantial available unused credit and is committed to its investment-grade credit ratings.
  • 7Sempra announced a two-for-one stock split in the form of a stock dividend, effective August 22, 2023.

Frequently Asked Questions

For the nine months ended September 30, 2023, Sempra reported a significant increase in net income attributable to common shares, reaching $2.29 billion, up from $1.66 billion in the same period of 2022. This growth was driven by strong performance across its segments, particularly Sempra Infrastructure and SoCalGas, alongside effective management of capital expenditures and operating expenses.

The resolution of litigation and regulatory matters related to the Aliso Canyon leak had a material positive impact on SoCalGas's results. In the nine months ended September 30, 2023, SoCalGas reported an earnings increase of $192 million compared to the prior year, largely due to the absence of a significant charge in 2022 related to the leak and favorable income tax benefits.

Sempra Infrastructure's earnings increased significantly in the first nine months of 2023, driven by strong performance in asset and supply optimization, which benefited from unrealized gains on commodity derivatives due to changes in natural gas prices. Additionally, favorable impacts from foreign currency and inflation effects on Mexican monetary positions, along with lower net interest expense and higher equity earnings from its transportation business, contributed to the improved results.

Sempra has a substantial capital expenditure plan, with approximately $38.6 billion expected from 2023 through 2027. These investments are primarily focused on infrastructure improvements within its utilities (SDG&E and SoCalGas) and the development of large-scale projects, notably the PA LNG Phase 1 project within Sempra Infrastructure.