Why did GAAP earnings differ from adjusted earnings this quarter?

GAAP earnings of $906 million were $36 million below adjusted earnings of $942 million. The difference reflects after-tax net unrealized losses of $35 million on commodity derivatives and $9 million on interest rate swaps related to Port Arthur LNG Phase 1, partly offset by an $8 million favorable impact from Mexican monetary positions. Management excludes these items because they are non-cash and can vary significantly from period to period.

Why was full-year 2025 GAAP EPS guidance lowered while adjusted guidance was kept?

The GAAP guidance range was narrowed to $4.25–$4.65 to reflect actual first-quarter results, including the derivative losses and currency effects that are excluded from adjusted results. Because adjusted EPS guidance of $4.30–$4.70 was affirmed, management's view of underlying operating performance did not change.

What are the expected benefits and risks of the planned asset sales?

Management expects the sales of Ecogas México and a minority stake in Sempra Infrastructure Partners to be accretive to EPS and to strengthen credit, with completion targeted within 12–18 months. Risks include reaching acceptable pricing and terms, obtaining regulatory and other approvals, and finalizing definitive contracts. The minority stake in SI Partners is also subject to rights of first offer held by KKR and ADIA affiliates.

How is Sempra's growth outlook supported by its utility operations?

Oncor has a $36.1 billion five-year capital plan and expects to file a base rate case in the second quarter of 2025. Texas electricity demand is rising, with ERCOT setting a February winter peak of 80.5 GW. In California, SDG&E and SoCalGas have filed cost of capital applications for 2026–2028, with a CPUC decision expected by year-end. Management reaffirmed a 7% to 9% long-term EPS compound annual growth target for 2025–2029.

What project milestones should investors monitor?

Energía Costa Azul LNG Phase 1 is targeting commercial operations in spring 2026. Port Arthur LNG Phase 1 construction is reported to be on time and on budget. Investors should also watch the Permian Basin Reliability Plan, where the PUCT decided in April 2025 that import paths will use 765-kV lines, and the outcome of the CPUC's cost of capital decision.

SRE/SREA 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed May 8, 2025. Cited figures are marked; the original filing is the authoritative source.

Sempra (NYSE: SRE) reported first-quarter 2025 GAAP earnings of $906 million^a, or $1.39 per diluted share, up from $801 million, or $1.26, in the first quarter of 2024.

Adjusted earnings were $942 million^b, or $1.44 per diluted share, versus $854 million, or $1.34, a year earlier. Segment results were led by Sempra California, which contributed $724 million, up from $582 million. Sempra Texas Utilities fell to $146 million from $183 million, and Sempra Infrastructure rose slightly to $146 million from $131 million.

Consolidated revenue increased 4% to $3.8 billion, while interest expense rose sharply to $433 million^c from $305 million, and income tax expense dropped to $57 million from $172 million. Capital expenditures for property, plant and equipment reached $2.3 billion, compared with $1.9 billion a year earlier. Management lowered its full-year 2025 GAAP EPS guidance to $4.25–$4.65, reflecting first-quarter results, and affirmed its adjusted EPS guidance of $4.30–$4.70 and its 2026 EPS guidance of $4.80–$5.30.

The company also reiterated a long-term EPS compound annual growth rate target of 7%^d to 9% for 2025 through 2029. Sempra announced it is targeting the sale of Ecogas México and a minority stake in Sempra Infrastructure Partners. Management expects these transactions to close over the next 12–18 months, to be accretive to EPS, and to enhance credit, but they remain subject to pricing, regulatory approvals, and definitive agreements.

For investors, the key takeaways are solid utility-driven earnings growth, continued heavy capital spending funded partly by debt, and the pending asset sales as a lever for deleveraging and earnings accretion. Oncor's growing interconnection queue and the Permian Basin Reliability Plan, estimated at roughly $35 billion combined with the regional plan, support long-term rate base growth. Execution risks include regulatory outcomes in California and Texas, the timing and pricing of divestitures, and project delivery at Energía Costa Azul and Port Arthur LNG.

02—Key points

Key Highlights

GAAP EPS of $1.39 rose 10% year over year from $1.26; adjusted EPS of $1.44 rose 7% from $1.34.
Sempra California was the largest earnings contributor at $724 million, up from $582 million, while Sempra Texas Utilities declined to $146 million from $183 million.
Full-year 2025 GAAP EPS guidance was lowered to $4.25–$4.65, while adjusted EPS guidance of $4.30–$4.70 and 2026 EPS guidance of $4.80–$5.30 were affirmed.
Planned sales of Ecogas México and a minority stake in Sempra Infrastructure Partners are expected to be accretive to EPS and enhance credit over 12–18 months.
Capital expenditures rose to $2.3 billion from $1.9 billion, driven mainly by Sempra Infrastructure, where spending rose to $1.24 billion from $790 million.
Interest expense increased 42% to $433 million, while total long-term debt rose to $33.3 billion from $31.6 billion at year-end 2024.
Oncor's transmission interconnection queue grew 35% to about 1,100 requests, and the regional transmission plans in Texas carry an estimated cost of roughly $35 billion.

03—Questions

Frequently Asked Questions

Why did GAAP earnings differ from adjusted earnings this quarter?
GAAP earnings of $906 million were $36 million below adjusted earnings of $942 million. The difference reflects after-tax net unrealized losses of $35 million on commodity derivatives and $9 million on interest rate swaps related to Port Arthur LNG Phase 1, partly offset by an $8 million favorable impact from Mexican monetary positions. Management excludes these items because they are non-cash and can vary significantly from period to period.
Why was full-year 2025 GAAP EPS guidance lowered while adjusted guidance was kept?
The GAAP guidance range was narrowed to $4.25–$4.65 to reflect actual first-quarter results, including the derivative losses and currency effects that are excluded from adjusted results. Because adjusted EPS guidance of $4.30–$4.70 was affirmed, management's view of underlying operating performance did not change.
What are the expected benefits and risks of the planned asset sales?
Management expects the sales of Ecogas México and a minority stake in Sempra Infrastructure Partners to be accretive to EPS and to strengthen credit, with completion targeted within 12–18 months. Risks include reaching acceptable pricing and terms, obtaining regulatory and other approvals, and finalizing definitive contracts. The minority stake in SI Partners is also subject to rights of first offer held by KKR and ADIA affiliates.
How is Sempra's growth outlook supported by its utility operations?
Oncor has a $36.1 billion five-year capital plan and expects to file a base rate case in the second quarter of 2025. Texas electricity demand is rising, with ERCOT setting a February winter peak of 80.5 GW. In California, SDG&E and SoCalGas have filed cost of capital applications for 2026–2028, with a CPUC decision expected by year-end. Management reaffirmed a 7% to 9% long-term EPS compound annual growth target for 2025–2029.
What project milestones should investors monitor?
Energía Costa Azul LNG Phase 1 is targeting commercial operations in spring 2026. Port Arthur LNG Phase 1 construction is reported to be on time and on budget. Investors should also watch the Permian Basin Reliability Plan, where the PUCT decided in April 2025 that import paths will use 765-kV lines, and the outcome of the CPUC's cost of capital decision.

04—Continue

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