01—Abstract
Summary
Summary of the 10-Q filed November 6, 2024. Cited figures are marked; the original filing is the authoritative source.
Sempra reported a decrease in revenues and net income for the nine months ended September 30, 2024, compared to the same period in the prior year.
Total revenues decreased by 28.7% to $9.43 billiona, and net income attributable to common shares fell by 8.2% to $2.15 billion. This decline was primarily driven by lower energy-related business revenues, impacted by softer commodity prices and reduced trading gains, as well as lower natural gas and electric revenues in Sempra California due to lower natural gas prices and volumes. The company also noted an increase in interest expense and lower income tax benefits.
Despite these headwinds, Sempra California's earnings remained substantial, supported by regulatory rate base growth and higher authorized cost of capital. Sempra Texas Utilities saw an increase in earnings, driven by rate updates and customer growth at Oncor.
Sempra Infrastructure's earnings were impacted by lower commodity derivative gains and reduced volumes in its renewables business, although positive foreign currency and inflation impacts provided some offset. The company ended the period with a solid liquidity position and available unused credit, while also actively managing its capital structure through debt issuances and common stock offerings.
02—Key points
Key Highlights
- Total revenues for the nine months ended September 30, 2024, decreased by 28.7% to $9.43 billion compared to $13.23 billion in the prior year.
- Net income attributable to common shares for the nine months ended September 30, 2024, decreased by 8.2% to $2.15 billion compared to $2.29 billion in the prior year.
- Sempra California experienced a decline in earnings due to lower natural gas and electric revenues, primarily driven by lower commodity prices and volumes, as well as reduced income tax benefits.
- Sempra Texas Utilities (Oncor) reported higher earnings driven by rate updates reflecting increased invested capital, customer growth, and new base rates.
- Sempra Infrastructure's earnings were impacted by lower commodity derivative gains, reduced renewable volumes, and lower natural gas prices, though foreign currency impacts provided some positive offset.
- The company has an "at-the-market" (ATM) equity offering program with an aggregate gross sales price of up to $3.0 billion, initiated on November 6, 2024.
- Sempra's credit ratings remained at investment grade levels, with Moody's, S&P, and Fitch maintaining stable outlooks for Sempra and SDG&E, while S&P assigned a negative outlook to SoCalGas' credit rating.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 6, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $2.78B$3.33B | −16.7% |
| Net Income | $649.00M$721.00M | −10.0% |
| EPS (Basic) | $1.01$1.14 | −11.4% |
| EPS (Diluted) | $1.00$1.14 | −12.3% |
| Shares Outstanding (Basic) | 633.75M630.04M | +0.6% |
| Shares Outstanding (Diluted) | 638.06M632.32M | +0.9% |
05—Questions
Frequently Asked Questions
What were the main drivers behind Sempra's decreased revenues and net income in the third quarter and year-to-date 2024?
Sempra's revenues and net income declined primarily due to lower commodity prices and volumes impacting Sempra California's natural gas and electric businesses. Sempra Infrastructure also saw reduced earnings due to lower commodity derivative gains and decreased renewable energy volumes. Additionally, higher interest expenses and lower income tax benefits across segments contributed to the overall decline.
How is Sempra managing its capital and liquidity needs?
Sempra expects to meet its cash requirements through operating cash flows, existing cash balances, borrowings under committed credit facilities, new debt issuances, equity offerings (including its ATM program), and distributions from equity investments. The company maintains a solid liquidity position with significant available unused credit and continues to manage its capital structure to maintain its investment-grade credit ratings.
What is the status of regulatory proceedings for Sempra California (SDG&E and SoCalGas)?
Sempra California (SDG&E and SoCalGas) recorded revenues based on 2023 authorized levels as the final decision for the 2024 General Rate Case (GRC) was pending at the reporting date. A proposed decision was issued, and a final decision was expected by the end of the year. Furthermore, the CPUC issued a final decision to modify the Cost of Capital Mechanism (CCM), which will reduce authorized ROE starting in 2025. SDG&E is also seeking recovery of wildfire mitigation plan costs through separate GRC tracks.
What are the key risks Sempra faces?
Sempra faces risks including California wildfires, regulatory decisions, cybersecurity threats, capital availability, and commodity price volatility. The company also highlighted risks associated with its ATM program, particularly the potential for forward sale agreements to be accelerated, leading to share dilution. Legal and environmental matters, especially in Mexico, also pose potential risks.
06—Continue