Skip to content
AnalystLens

Sempra 8-K Report, Financial Results (Aug 6, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed August 6, 2024
Period End
August 6, 2024
Securities
SRESREA
In the record · 2016–202610-K1110-Q328-K215

SRE filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 215 current reports (8-K) between 2016 and 2026.

  1. Impairment8-K · Sep ’16Sep ’16
  2. Leadership change8-K · Aug ’19Aug ’19
  3. Material agreement8-K · Sep ’21Sep ’21
  4. Leadership change8-K · Jul ’26Jul ’26

01—Abstract

Summary

Summary of the 8-K filed August 6, 2024. Cited figures are marked; the original filing is the authoritative source.

Sempra (NYSE: SRE) reported second-quarter 2024 GAAP earnings of $713 milliona, or $1.12 per diluted share, up from $603 million, or $0.95, a year earlier.

Adjusted earnings were $567 millionb, or $0.89 per share, down from $594 million, or $0.94, in Q2 2023. For the first six months, GAAP earnings were $1.514 billion ($2.38 per share) versus $1.572 billion ($2.49) a year earlier, and adjusted earnings were $1.421 billion ($2.24 per share) versus $1.516 billion ($2.40). The GAAP increase in the quarter was driven mainly by a $152 million after-tax favorable impact from foreign currency and inflation on Mexico monetary positions, which is excluded from adjusted results.

The underlying adjusted decline reflects weaker results at Sempra Infrastructure and Sempra California, partly offset by stronger Sempra Texas Utilities equity earnings. The company updated its full-year 2024 GAAP EPS guidance to $4.74 to $5.04c, while affirming adjusted EPS guidance of $4.60 to $4.90 and 2025 adjusted EPS guidance of $4.90 to $5.25. It also reaffirmed its long-term EPS growth target of roughly 6% to 8%.

Management highlighted a settlement in principle at Oncor on a nearly $3 billiond System Resiliency Plan, which would add incremental capital beginning in Q4 2024 pending PUCT approval. Oncor's load growth pipeline also rose, with 814 interconnection requests in queue, up 13% year over year. Investors should weigh several items.

The Energía Costa Azul LNG Phase 1 project is about 85% complete but faces labor and productivity challenges, with first LNG now expected in 2025 and commercial operations targeted for spring 2026. Port Arthur LNG Phase 2 advanced through a non-binding heads of agreement with an Aramco subsidiary and a fixed-price EPC contract with Bechtel.

The California utilities' rate case decision is expected before year-end 2024, with rates retroactive to January 1, 2024. Quarterly capital expenditures were $2.09 billion, down from $2.55 billion, and short-term debt and current maturities of long-term debt rose meaningfully, which bears watching given the company's large capital program.

02—Key points

Key Highlights

  1. Q2 2024 GAAP EPS of $1.12 rose from $0.95, while adjusted EPS of $0.89 fell from $0.94; the GAAP gain was largely driven by a $152M after-tax Mexico FX and inflation benefit.
  2. Full-year 2024 GAAP EPS guidance was raised to $4.74–$5.04, while adjusted EPS guidance of $4.60–$4.90 and 2025 adjusted EPS guidance of $4.90–$5.25 were affirmed.
  3. Sempra Texas Utilities (Oncor) earnings rose to $202M in Q2 from $160M, supported by load growth and a settlement in principle on a ~$3B System Resiliency Plan.
  4. Sempra Infrastructure earnings rose to $291M from $208M on a GAAP basis, but its six-month earnings fell to $422M from $523M.
  5. Energía Costa Azul LNG Phase 1 is about 85% complete, but first LNG has slipped to 2025 due to labor and productivity challenges, with commercial operations targeted for spring 2026.
  6. Port Arthur LNG Phase 2 advanced with a non-binding heads of agreement with an Aramco subsidiary for 5 MTPA of LNG and a 25% equity stake, plus a fixed-price EPC contract with Bechtel.
  7. Six-month operating cash flow fell to $2.52B from $3.74B, mainly due to a working capital swing, while short-term debt and current portion of long-term debt increased.

03—Questions

Frequently Asked Questions

  1. Why did GAAP earnings rise in Q2 2024 while adjusted earnings fell?

    GAAP earnings include a $152 million after-tax favorable impact from foreign currency and inflation on Sempra's Mexico monetary positions, which management excludes from adjusted earnings. Excluding this and a small derivative loss, adjusted earnings declined to $567 million from $594 million, mainly reflecting lower Sempra Infrastructure and Sempra California contributions.

  2. Did Sempra change its 2024 or 2025 earnings guidance?

    Sempra raised its full-year 2024 GAAP EPS guidance to $4.74–$5.04 to reflect actual results through Q2. It affirmed the 2024 adjusted EPS range of $4.60–$4.90, the 2025 adjusted EPS range of $4.90–$5.25, and its long-term EPS growth target of about 6% to 8%.

  3. What is the significance of the Oncor System Resiliency Plan settlement?

    Oncor reached a settlement in principle on a System Resiliency Plan that originally proposed nearly $3 billion of capital investment over three years. Pending documentation and Public Utility Commission of Texas approval, implementation is expected to begin in Q4 2024, with the capital incremental to Oncor's existing capital program, which could support future rate base growth.

  4. What are the main project risks for Sempra's LNG businesses?

    Energía Costa Azul LNG Phase 1 is about 85% complete but has experienced labor and productivity challenges, pushing first LNG to 2025 and commercial operations to spring 2026. Port Arthur LNG Phase 2 is still in development, with a non-binding heads of agreement and an EPC contract in place, but a final investment decision and completion on schedule and budget remain key uncertainties.

04—Continue

← View all 8-K filings