Company Overview - Sempra (SRE) has a market capitalization of $60.3 billion and is a prominent energy infrastructure company focusing on energy distribution, transmission, and infrastructure development in the U.S. and international markets, aiding the energy transition with electricity and natural gas services [1] Stock Performance - Over the past 52 weeks, SRE shares have underperformed the broader market, rising only 5.9% compared to a 14.5% increase in the S&P 500 Index [2] - Year-to-date, SRE shares are up 6.5%, while the S&P 500 has gained 15.4% [2] - SRE has also lagged behind the Utilities Select Sector SPDR Fund (XLU), which returned 14.9% over the same period [3] Financial Performance - Sempra reported a better-than-expected Q3 2025 adjusted EPS of $1.11, driven by strong performance at its Texas utility Oncor, which is expanding its grid to meet rising power demand [4] - For the fiscal year ending December 2025, analysts expect SRE's adjusted EPS to decline by 2.6% year-over-year to $4.53 [5] - The company's earnings surprise history is mixed, beating consensus estimates in three of the last four quarters [5] Analyst Ratings and Price Targets - Among 19 analysts covering SRE, the consensus rating is a "Moderate Buy," with nine "Strong Buy" ratings, one "Moderate Buy," and nine Holds [5] - Morgan Stanley analyst David Arcaro raised the price target on Sempra Energy to $99, maintaining an "Overweight" rating, with a mean price target of $96.57, indicating a 3.8% premium to current levels [6] - The highest price target of $115 implies a potential upside of 23.6% from current price levels [6]

Financial Performance - The company reported a significant increase in revenue, reaching $5.2 billion for the quarter, representing a 15% year-over-year growth[12]. - Net income for Q3 2025 was $577 million, a 6.1% increase from $544 million in Q3 2024[22]. - Comprehensive income for Q3 2025 reached $580 million, compared to $461 million in Q3 2024, reflecting a significant improvement[22]. - Net income for the nine months ended September 30, 2025, was $1,588 million, a decrease of 36.7% compared to $2,511 million in 2024[25]. - Total revenues for Sempra reached $3,151 million for the three months ended September 30, 2025, an increase of 13.5% from $2,776 million in the same period of 2024[138]. - Total revenues for the nine months ended September 30, 2025, were $9,953 million, an increase from $9,427 million in the same period of 2024, representing a growth of 5.6%[139]. User Engagement - User data showed a 20% increase in active users, totaling 10 million, indicating strong customer engagement[12]. Future Outlook - The company provided an optimistic outlook for the next quarter, projecting revenue growth of 10% to 12%[12]. - New product launches are expected to contribute an additional $300 million in revenue over the next fiscal year[12]. - The company is expanding its market presence in Latin America, targeting a 25% increase in market share by 2025[12]. Strategic Initiatives - A strategic acquisition of a smaller competitor was completed, valued at $1.2 billion, aimed at enhancing technological capabilities[12]. - The company plans to invest $500 million in renewable energy projects over the next three years[12]. - Research and development expenses increased by 18%, totaling $400 million, to support innovation initiatives[12]. Financial Position - Total assets increased to $106.919 billion as of September 30, 2025, up from $96.155 billion at the end of 2024, indicating strong growth[23]. - Current liabilities rose to $19.988 billion in Q3 2025, compared to $9.676 billion in Q4 2024, highlighting increased short-term obligations[24]. - Long-term debt decreased to $28.985 billion in Q3 2025 from $31.558 billion in Q4 2024, showing improved debt management[24]. - Cash and cash equivalents significantly decreased to $5 million from $1.565 billion, indicating a potential liquidity concern[23]. - The balance of total equity at September 30, 2025, was $38,286 million, compared to $35,880 million in 2024, reflecting a 6.7% increase[28]. Operating Expenses - Operating expenses for the nine months ended September 30, 2025, totaled $3,084 million, up from $2,919 million in 2024, reflecting an increase of 5.7%[32]. - The cost of electric fuel and purchased power for the three months ended September 30, 2025, was $135 million, compared to a decrease of $5 million in the same period of 2024[32]. Dividends and Shareholder Returns - Common dividends paid increased to $1,195 million from $1,121 million, reflecting a 6.6% rise[25]. - The company declared dividends of $1,262 million for common stock in the nine months ended September 30, 2025, compared to $1,177 million in 2024, representing a year-over-year increase of 7.2%[32]. Debt and Financing - Issuances of debt (maturities greater than 90 days) reached $8,892 million, up from $6,437 million, marking a 38.3% increase[25]. - The weighted-average interest rate for Sempra's short-term debt was 4.84% as of September 30, 2025, down from 5.03% at the end of 2024[200]. - Sempra had an aggregate capacity of $10.2 billion under committed lines of credit as of September 30, 2025, supporting liquidity and commercial paper programs[190]. Regulatory and Compliance - The company anticipates continued growth in utility revenues driven by regulatory adjustments and infrastructure investments[147]. - SDG&E submitted a Track 2 request for $1.5 billion in wildfire mitigation costs incurred from 2019 to 2022, with a proposed decision expected by the end of 2025[153]. Asset Management - The company reported a total of $28.465 billion in assets held for sale as of September 30, 2025, indicating potential divestitures[23]. - Total inventories for Sempra increased to $565 million as of September 30, 2025, compared to $559 million as of December 31, 2024[89]. Taxation - The effective income tax rate for Sempra was 165% for the three months ended September 30, 2025, compared to -32% for the same period in 2024[128]. - Sempra's income tax expense for the three months ended September 30, 2025, was $482 million, compared to an income tax benefit of $105 million for the same period in 2024[128].

Financial Data and Key Metrics Changes - The company reported third quarter 2025 adjusted EPS of $1.11, an increase from $0.89 in the prior period [5][17] - Full year 2025 adjusted EPS guidance remains at $4.30-$4.70, with 2026 EPS guidance set at $4.80-$5.30 [6][21] - Third quarter 2025 GAAP earnings were $77 million, or $0.12 per share, compared to $638 million, or $1 per share in the same period last year [17] Business Line Data and Key Metrics Changes - Sempra California saw a $76 million increase in earnings primarily from higher income tax benefits, offset by higher net interest expense [18] - Sempra Texas reported $45 million of higher equity earnings due to increased invested capital and Oncor's system resiliency plan [19] - Sempra Infrastructure experienced a $26 million increase from higher asset optimization, despite lower transportation results [19] Market Data and Key Metrics Changes - Oncor's active load connections increased over 10% from the prior quarter, with a premise count increase of 16,000 [15] - The Texas 765 transmission expansion is projected to require $32 billion-$35 billion for full buildout, with Oncor expected to surpass 50% of this investment [16] Company Strategy and Development Direction - The company is focusing on lower risk and higher value transmission and distribution investments, particularly in Texas [4] - A significant transaction involved selling a 45% stake in Sempra Infrastructure Partners for $10 billion, aimed at improving business growth and capital efficiency [7][8] - The company is prioritizing capital allocation to Texas, anticipating substantial increases in its capital plan [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing growth of utilities, particularly in Texas, and the importance of maintaining a strong balance sheet [30] - The company is optimistic about achieving strong year-over-year growth and is tracking several regulatory decisions that will impact financial results [18][62] Other Important Information - The enactment of California SB 254 is viewed as a significant de-risking event for California Electric Utilities [10] - The company is actively engaged in settlement discussions regarding Oncor's base rate review, with a hearing scheduled for November 17 [35] Q&A Session Summary Question: Balance sheet capacity for increased CapEx at Oncor - Management indicated that proceeds from the Sempra Infrastructure transaction are expected to eliminate the need for common equity in the 2025-2029 financing plan [26][27] Question: Update on Texas transmission expansion - Management confirmed ongoing settlement discussions and expressed confidence in the strength of their case regarding Oncor's base rate review [34][35] Question: Status of the SIP transaction and tax implications - Management confirmed that a 20% tax leakage estimate remains valid, with ongoing evaluations of the transaction's tax efficiency [42] Question: Load growth potential in Texas - Oncor is confident in doubling its load by 2030, driven by the state's desire to accelerate the transmission plan [53][54] Question: Confidence in achieving ROEs with increased capital spending - Management noted that Oncor's authorized ROE of 9.7% has been under-earning due to regulatory lag, but improvements are expected with the resolution of ongoing matters [95]

Financial Data and Key Metrics Changes - The company reported third quarter 2025 adjusted EPS of $1.11, an increase from $0.89 in the prior period [5][17] - Full year 2025 adjusted EPS guidance remains at $4.30-$4.70, with 2026 EPS guidance set at $4.80-$5.30 [6][21] - Third quarter 2025 GAAP earnings were $77 million, or $0.12 per share, compared to $638 million, or $1 per share in the same period last year [17] Business Line Data and Key Metrics Changes - Sempra California saw a $76 million increase in earnings primarily from higher income tax benefits, offset by higher net interest expense [18] - Sempra Texas reported $45 million of higher equity earnings due to increased invested capital and Oncor's system resiliency plan [19] - Sempra Infrastructure experienced a $26 million increase from higher asset optimization, despite lower transportation results [19] Market Data and Key Metrics Changes - Oncor's active LC&I queue increased over 10% from the prior quarter, with a premise count increase of 16,000 [15] - The Texas 765 transmission expansion is projected to require $32 billion-$35 billion for full buildout, with Oncor's portion expected to exceed 50% [16] Company Strategy and Development Direction - The company is focusing on lower risk and higher value transmission and distribution investments, particularly in Texas [4] - A significant transaction involved selling a 45% stake in Sempra Infrastructure Partners for $10 billion, aimed at improving business growth and capital efficiency [7][8] - The company is prioritizing capital allocation to Texas, anticipating a substantial increase in Oncor's capital plan by over 30% [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing growth in Texas and the importance of maintaining a strong balance sheet to support future growth [30] - The company is optimistic about achieving strong year-over-year growth and is tracking several regulatory decisions that will impact financial results [18][21] Other Important Information - The company is actively engaged in regulatory matters in California, including the GRC and cost of capital proceedings [11] - The Port Arthur LNG Phase I project is on schedule, with Train One expected to reach COD in 2027 [12] Q&A Session Summary Question: Balance sheet capacity for increased CapEx at Oncor - Management indicated that proceeds from the Sempra Infrastructure transaction are expected to eliminate the need for common equity in the 2025-2029 financing plan [26][27] Question: Status of the SIP transaction and tax implications - The company is still assuming around a 20% tax leakage from the SIP transaction, with ongoing evaluations [42] Question: Load growth potential in Texas - Oncor is confident in doubling its load by 2030, driven by the state's desire to support the oil and gas industry [52][53] Question: ROE expectations with increased capital spending - Management expects a material improvement in ROE as regulatory lag issues are resolved and a new test year is established [96] Question: Equipment and supply chain readiness for capital plans - The company has made significant investments in its supply chain and logistics to ensure readiness for its growth plans [70][71] Question: Strategic options for California utilities - Management emphasized that California remains an important part of the company, complementing growth in Texas while minimizing customer bill impacts [84][86]

Financial Data and Key Metrics Changes - The company reported third quarter 2025 adjusted EPS of $1.11, an increase from $0.89 in the prior period [5][17] - Full year 2025 adjusted EPS guidance range is affirmed at $4.30-$4.70, with 2026 EPS guidance at $4.80-$5.30 [5][17] - Third quarter 2025 GAAP earnings were $77 million, or $0.12 per share, compared to $638 million, or $1 per share in the same quarter of 2024 [17] Business Line Data and Key Metrics Changes - Sempra California saw a $76 million increase in earnings primarily from higher income tax benefits, offset by higher net interest expense [18] - Sempra Texas reported $45 million of higher equity earnings due to increased invested capital and Oncor's system resiliency plan [19] - Sempra Infrastructure experienced a $26 million increase from higher asset optimization, partially offset by lower transportation results [19] Market Data and Key Metrics Changes - Oncor's active load connections increased by over 10% from the prior quarter, with a premise count increase of 16,000 [15] - The Texas 765 transmission expansion is projected to require $32 billion-$35 billion for full buildout, with Oncor's portion expected to exceed 50% [16] Company Strategy and Development Direction - The company is focusing on lower risk and higher value transmission and distribution investments, particularly in Texas [4] - A significant transaction to sell a 45% stake in Sempra Infrastructure Partners for $10 billion is expected to improve the business growth profile and unlock reinvestment capital [6][7] - The company aims to fortify its balance sheet and improve credit metrics through strategic capital allocation [6][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing growth in Texas and the potential for substantial capital investment opportunities [20] - The company is tracking several regulatory matters in California that are expected to influence financial results [18] - Management remains optimistic about achieving the 2025 guidance and anticipates strong year-over-year growth [62] Other Important Information - The company is actively engaged in improving community safety and operational excellence, including efforts to enhance the regulatory environment [7] - The ongoing sales process for EcoGas is generating significant interest, with final bids expected before year-end [7] Q&A Session Summary Question: How is the company viewing balance sheet capacity for increased CapEx at Oncor? - Management indicated that proceeds from the Sempra Infrastructure transaction are expected to eliminate 100% of the common equity previously in the financing plan, fortifying the balance sheet for growth [28][30] Question: What is the status of the base rate review in Texas? - Management confirmed that settlement discussions are ongoing, with a hearing set for November 17th, and expressed confidence in the strength of their case [36][38] Question: What is the expected leakage from the SIP transaction? - Management stated that a 20% leakage is still a good estimate, considering the complexity of the assets involved [44] Question: How does the company view the load growth pipeline in Texas? - Management noted that Oncor's system is expected to double its load by 2030, driven by the state's desire to support the oil and gas industry [54][56] Question: What is the company's approach to equity needs moving forward? - Management indicated that while equity issuance is not off the table, they are focused on maintaining a strong balance sheet and will consider all funding options as needed [96]

Financial Performance - Sempra reported Q3 2025 adjusted EPS of $1.11 and YTD 2025 adjusted EPS of $3.45[13, 31] - The company is affirming FY 2025 adjusted EPS guidance range of $4.30 - $4.70 and FY 2026 EPS guidance range of $4.80 - $5.30[13, 31] - Sempra is also affirming guidance at the high-end or above projected EPS CAGR of 7% - 9% for 2025 through 2029[13, 31] Strategic Initiatives - Sempra is investing $13 billion this year, prioritizing utility investments and improved returns[14] - The company has deployed approximately $9 billion in CapEx YTD[14] - A definitive equity sales agreement has been announced to unlock value in the LNG franchise, and FID has been reached for Port Arthur LNG Phase 2[14] - Sempra is targeting Ecogas sale close in mid-2026 to sell non-core assets in Mexico, simplifying the business and reducing portfolio risk[14] - The company is executing Fit for 2025 to reduce costs and improve productivity, including reducing full-time and contracted workforce and implementing new technologies[14] Business Updates - Sempra has signed a definitive sales agreement to sell a 45% stake in SI Partners for $10 billion[17] - Oncor invested $4.5 billion CapEx YTD, with Q3 premise count increasing by approximately 16,000 and building or upgrading approximately 660 circuit miles of T+D lines[19] - Oncor's 2026-2030 capital plan is expected to increase by over 30%, driven by transmission expansion plans[19, 20, 31]

Core Insights - Sempra Energy reported third-quarter 2025 adjusted earnings per share (EPS) of $1.11, exceeding the Zacks Consensus Estimate of 93 cents by 19.4%, and reflecting a 24.7% increase from the previous year's figure of 89 cents [1][6] - Total revenues for the quarter were $3.15 billion, falling short of the Zacks Consensus Estimate of $3.22 billion by 2.2%, but representing a 13.3% increase from $2.78 billion in the same quarter last year [2][6] Segmental Performance - Sempra California reported quarterly earnings of $370 million, up from $247 million in the year-ago quarter [3] - Sempra Texas Utilities saw earnings rise to $306 million from $261 million in the previous year [3] - Sempra Infrastructure experienced a loss of $580 million, compared to earnings of $230 million in the year-ago quarter [3] - The Parent and Other segment reported a loss of $19 million, an improvement from the prior year's loss of $100 million [3] Financial Position - As of September 30, 2025, cash and cash equivalents totaled $0.005 billion, a significant decrease from $1.57 billion as of December 31, 2024 [4] - Long-term debt and finance leases amounted to $28.98 billion, down from $31.56 billion as of December 31, 2024 [4] - Cash flow from operating activities for the first nine months of 2025 was $3.38 billion, compared to $3.54 billion in the same period last year [4] Guidance and Outlook - Sempra Energy reaffirmed its 2025 adjusted EPS guidance in the range of $4.30-$4.70, with the Zacks Consensus Estimate for 2025 earnings at $4.53 per share [5][6] - The company also expects its 2026 earnings to be in the range of $4.80-$5.30 per share, with the Zacks Consensus Estimate for 2026 earnings at $5.15 per share [5] - The long-term EPS growth rate is projected to be at the high end or above the earlier projected band of 7-9% through 2029 [7]

Financial Performance - Sempra reported third-quarter 2025 GAAP earnings of $77 million or $0.12 per diluted share, a significant decrease from $638 million or $1.00 per diluted share in the same quarter of 2024[3]. - Adjusted earnings for the first nine months of 2025 were $2.253 billion or $3.45 per diluted share, compared to $1.987 billion or $3.12 per diluted share in the first nine months of 2024, reflecting a 13.5% increase[4]. - Sempra's GAAP earnings for the first nine months of 2025 were $1.444 billion or $2.21 per diluted share, down from $2.152 billion or $3.38 per diluted share in the same period of 2024[4]. - Total revenues for Q3 2025 reached $3,151 million, a 13.5% increase from $2,776 million in Q3 2024[26]. - Net income for Q3 2025 was $150 million, a significant decrease of 80.2% compared to $759 million in Q3 2024[26]. - Adjusted EPS for Q3 2025 was $0.12, down from $1.00 in Q3 2024, reflecting a decline of 88%[30]. - The company reported a net income of $1,588 million for the nine months ended September 30, 2025, compared to $2,511 million for the same period in 2024[41]. - Sempra's GAAP EPS guidance range for full-year 2025 is projected to be between $3.05 and $3.45, while the adjusted EPS guidance range is between $4.30 and $4.70[34]. Capital Expenditures and Investments - Oncor Electric Delivery Company expects a more than 30% increase in its 2026-2030 base capital plan, building on a $36 billion 2025-2029 base capital plan[9]. - The company is advancing six major projects, including the development of Port Arthur LNG Phase 2, which is subscribed with long-term offtake agreements[14]. - Capital expenditures for property, plant, and equipment totaled $7,201 million for the nine months ended September 30, 2025, compared to $5,765 million for the same period in 2024[42]. - Sempra announced a strategic transaction to sell a 45% equity interest in Sempra Infrastructure Partners, expected to close in Q2-Q3 2026, to support its value creation initiatives[8]. Revenue and Sales Performance - The company reported a total of $1,363 million in natural gas revenues for Q3 2025, up 14.1% from $1,195 million in Q3 2024[26]. - Gas sales for Sempra California decreased to 56 Bcf in Q3 2025 from 54 Bcf in Q3 2024, while total deliveries fell to 197 Bcf from 211 Bcf[44]. - Electric sales in Sempra California dropped to 820 million kWh in Q3 2025 compared to 857 million kWh in Q3 2024, with total electric deliveries decreasing to 4,571 million kWh from 4,819 million kWh[44]. - Oncor Electric Delivery Company LLC reported total electric deliveries of 50,761 million kWh in Q3 2025, up from 46,208 million kWh in Q3 2024, indicating a growth of approximately 11%[44]. Operating Expenses and Financial Health - Operating expenses increased to $1,349 million in Q3 2025, compared to $1,326 million in Q3 2024, marking a rise of 1.7%[26]. - Interest expense increased to $403 million in Q3 2025, compared to $328 million in Q3 2024, reflecting a rise of 22.9%[26]. - Total current assets increased significantly to $31,726 million as of September 30, 2025, compared to $5,285 million as of December 31, 2024[37]. - Total liabilities increased to $68,633 million as of September 30, 2025, from $58,367 million as of December 31, 2024[39]. - Cash, cash equivalents, and restricted cash increased to $3,025 million as of September 30, 2025, from $690 million in the same period of 2024[41]. - Sempra's total assets reached $106,919 million as of September 30, 2025, compared to $96,155 million as of December 31, 2024[39]. Tax and Regulatory Matters - The company reported a $514 million net income tax expense due to the classification of Sempra Infrastructure Partners as held for sale[29]. - The company experienced a $(540) million net income tax expense due to the classification of SI Partners and Ecogas as held for sale[35]. - California's Senate Bill 254 established an up to $18 billion continuation account to enhance the wildfire fund's stability, benefiting San Diego Gas & Electric Company[12]. Customer Metrics and Energy Production - Total electric customer meters for Oncor increased to 4,100 thousand in Q3 2025 from 4,027 thousand in Q3 2024[44]. - Total electric customer meters for Sempra California rose to 1,545 thousand in Q3 2025 from 1,529 thousand in Q3 2024[44]. - Total gas customer meters for Sempra California increased to 7,126 thousand in Q3 2025 from 7,107 thousand in Q3 2024[44]. - Sempra Infrastructure's Termoeléctrica de Mexicali generated 1,001 million kWh in Q3 2025, a decrease from 1,081 million kWh in Q3 2024[44]. - Wind and solar energy production in Sempra Infrastructure was 643 million kWh in Q3 2025, down from 687 million kWh in Q3 2024[44].

Core Insights - Sempra reported quarterly earnings of $1.11 per share, exceeding the Zacks Consensus Estimate of $0.93 per share, and showing an increase from $0.89 per share a year ago, resulting in an earnings surprise of +19.35% [1] - The company generated revenues of $3.15 billion for the quarter ended September 2025, which was 2.2% below the Zacks Consensus Estimate, but up from $2.78 billion year-over-year [2] - Sempra's stock has increased by approximately 5.4% since the beginning of the year, underperforming compared to the S&P 500's gain of 15.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.28, with expected revenues of $3.71 billion, and for the current fiscal year, the EPS estimate is $4.53 on revenues of $13.73 billion [7] - The estimate revisions trend for Sempra was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Utility - Gas Distribution industry, to which Sempra belongs, is currently ranked in the top 24% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Another company in the same industry, Spire, is expected to report a quarterly loss of $0.46 per share, with revenues projected at $307.96 million, reflecting a year-over-year increase of 4.8% [9][10]

Core Insights - Energy infrastructure firm Sempra exceeded third-quarter profit estimates, primarily due to increased investments in its Texas utility operations [1] - The company is also taking steps to streamline operations and improve efficiency in its California units [1] Financial Performance - Sempra's third-quarter profits were driven by significant growth in its Texas utility investments [1] - The financial results indicate a positive trend in profitability, suggesting strong operational performance [1] Operational Developments - The company is focusing on operational streamlining in its California units, which may enhance overall efficiency and reduce costs [1] - These operational improvements are part of a broader strategy to optimize performance across its various business segments [1]