With 17,000 employees, the Sempra Energy (SRE, Financial) companies develop energy infrastructure, operate utilities and provide related products and services to more than 32 million consumers worldwide.
Sempra Energy’s California utilities, San Diego Gas and Electric and SoCalGas, serve more than 20 million consumers. Its other businesses – Sempra U.S. Gas & Power and Sempra International – develop and operate critical energy infrastructure and provide gas and electricity services in North and South America.
The company reported a strong third quarter and is poised to grow. The company has raised adjusted earnings guidance for the year since the company is on track to realize its financial and operational objectives. The company’s growth prospects are excellent in U.S. midstream and international energy markets and the California utilities — SoCalGas and SDG&E — remain the bedrock of its business. The company’s successful track earned it a place on Fortune magazine’s list of the “World’s Most Admired Companies” for 2015.
Strong third quarter
Third-quarter earnings were $248 million, or 99 cents per diluted share ($348 million, or $1.39 per diluted share, in the prior-year quarter). For the first nine months of 2015, Sempra Energy's earnings were $980 million, or $3.91 per diluted share (an increase from $864 million, or $3.45 per diluted share, in the prior-year period).
Sempra Energy's nine-month results in 2015 included a $36 million after-tax gain on the sale of the second block of Sempra U.S. Gas & Power's Mesquite Power facility, $7 million after tax in liquefied natural gas (LNG) liquefaction development expenses and a benefit of $13 million after tax for San Diego Gas & Electric (SDG&E)Â –Â due to the reduction in the loss related to the San Onofre Nuclear Generating Station (SONGS).
In the first nine months of 2014, SDG&E recorded a $9 million charge related to the closure of SONGS. Excluding items in both years, Sempra Energy's adjusted earnings in the first nine months of 2015 were $938 million, or $3.75 per diluted share, up from $873 million, or $3.49 per diluted share, in the first nine months of last year.
Beginning in the first quarter 2015, Southern California Gas Co. (SoCalGas) adopted an order by the California Public Utilities Commission (CPUC) to recognize revenues from the utility's core activities on a seasonally adjusted basis (seasonality). The application of seasonality in revenues will result in substantially all of SoCalGas' annual earnings being reported in the first and fourth quarters of the year but will not affect full-year operating earnings or cash flow.
Sempra Energy's third-quarter 2015 earnings reflected $113 million lower earnings at SoCalGas due to seasonality, compared with the third quarter 2014. For the first nine months of 2015, Sempra Energy's earnings were $48 million lower at SoCalGas due to seasonality, compared with the same period last year. Sempra Energy will see a $48 million after-tax benefit at SoCalGas in the fourth quarter related to seasonality.
California utilities
San Diego Gas & Electric
Earnings for SDG&E in the third quarter 2015 were $170 million (an increase from $157 million in the prior-year quarter).
For the first nine months of 2015, SDG&E's earnings were $443 million (an increase from $379 million in the prior-year period).
Southern California Gas Co.
SoCalGas recorded a loss of $8 million in the third quarter 2015, compared with earnings of $98 million in last year's third quarter. The reduction in earnings was due primarily to seasonality of revenues, which had a $113 million negative impact for the most recent quarter.
For the first nine months of 2015, SoCalGas' earnings were $276 million in 2015, which marked an increase from $256 million in the prior year period.
Sempra International
Sempra South American Utilities
In the third quarter 2015, earnings for Sempra South American Utilities increased to $43 million from $32 million in the third quarter 2014, due primarily to higher operating earnings and lower income-tax expense.
For the first nine months of 2015, earnings for Sempra South American Utilities were $129 million, up from $109 million in the same period last year.
Sempra Mexico
Third-quarter earnings for Sempra Mexico were $63 million in 2015, unchanged from last year. In last year's third quarter, Sempra Mexico recorded a $14 million benefit related to the sale of a 50% equity interest in the first phase of the EnergĂ Âa Sierra Juárez wind project.
For the nine-month period, Sempra Mexico had earnings of $160 million in 2015, up from $139 million in 2014.
Sempra U.S. Gas & Power
Sempra Renewables
Earnings for Sempra Renewables in the third quarter 2015 were $15 million, compared with $17 million in the third quarter 2014.
During the first nine months of 2015, earnings for Sempra Renewables were $47 million, compared with $63 million in the first nine months of 2014. Nine-month earnings for Sempra Renewables in 2014 included a $16 million first-quarter benefit from the sale of a 50% equity interest in the Copper Mountain Solar 3 facility.
Sempra Natural Gas
Sempra Natural Gas had third-quarter earnings of $1 million in 2015, compared with earnings of $26 million in 2014, due primarily to a Louisiana state income tax benefit in 2014.
For the first nine months of 2015, Sempra Natural Gas had earnings of $43 million (an increase from $39 million in the prior year period).
Dividend
On Dec. 15, 2015, the company declared a quarterly dividend of 70 cents per share of common stock.
(Source: Company’s website)
Focus
- The company’s strategy focuses on building new energy infrastructure that is contracted for the long term.
- It is pursuing multiple platforms for growth: in U.S. liquefied natural gas (LNG), midstream operations and renewable energy; in Mexico and South America, and through the California utilities.
- Strategic partnerships.
- The company expects to achieve compound annual growth in earnings per share of approximately 11% from 2015 through 2019.
On a concluding note
Sempra Energy is a Fortune 500 energy services company, based in San Diego, that combines deep industry expertise with rigorous risk management to deliver superior shareholder returns. In 2014, Sempra Energy produced revenues of approximately $11 billion.
Sempra Energy has been honored with numerous awards and recognitions. This list of selected awards reflects our commitment to operational excellence, sustainable business practices and a diverse workforce.
Sempra Energy was founded to capitalize on new opportunities in competitive energy markets. The company’s ongoing focus is to enhance shareholder value and meet customer needs by sustaining the financial strength, operational flexibility and skilled workforce needed to succeed in rapidly changing market conditions.
Disclosure: I do not hold any position in the stock.
