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Sempra Reports Second-Quarter Results for 2025

On August 7, 2025, Sempra (NYSE: SRE) announced its financial performance for the second quarter of 2025, adhering to Generally Accepted Accounting Principles (GAAP). The company reported earnings of $461 million, equating to $0.71 per diluted share. In comparison, the same period last year saw significantly higher GAAP earnings of $713 million or $1.12 per diluted share. Notably, on an adjusted basis, Sempra's second-quarter earnings reached $583 million, translating to $0.89 per diluted share, which demonstrates a slight increase from the adjusted earnings of $567 million during the same timeframe in 2024.

According to Jeffrey W. Martin, Sempra's Chairman and CEO, the results illustrate the company’s directional strategy, saying, "We are pleased to report another solid quarter. We remain focused on the disciplined execution of our value creation initiatives for 2025, with a view toward continuing to rotate capital into a more utility-centric business model." This endeavor emphasizes Sempra’s goal of evolving its financial structure while ensuring sustainable energy delivery.

Financial Highlights

A closer examination of the reported figures shows certain notable impacts influencing Sempra's financial results:

• - Regulatory Disallowances: The company faced $25 million in impacts related to regulatory disallowances affecting cost recovery.
• - Foreign Currency Influence: There was a significant adjustment of $97 million associated with foreign currency and inflation effects on monetary positions in Mexico, which contrasted with a $152 million impact from the previous year.
• - Unrealized Gains and Losses: During the quarter, Sempra recorded net unrealized gains and losses on derivatives amounting to $(25) million, contrasting with $6 million of net unrealized gains reported in the second quarter of 2024.

Following these adjustments, Sempra reaffirmed its full-year 2025 adjusted EPS guidance of $4.30 to $4.70, reflecting a cautious yet optimistic outlook amid ever-evolving market conditions.

Updates on Value Creation Initiatives

This quarter, Sempra made robust advancements on several key value creation initiatives critical to augmenting its infrastructure and adapting its business model:

• - Capital Recycling Program: The company disclosed ongoing negotiations for the sale of equity related to Sempra Infrastructure, extending a right of first offer process with KKR, alongside a sale process for Ecogas México. Both transactions show strong interest from financial and strategic buyers and are anticipated to close around the second or third quarter of 2026.
• - Legislative Developments in Texas: Recently, Texas passed new legislation predicted to bolster utilities, thus supporting economic growth and increasing energy demands. One significant addition is the Unified Tracker Mechanism intended to alleviate regulatory lag associated with capital investments, facilitating better earned returns on equity.
• - Oncor Electric Projects: Oncor Electric Delivery Company LLC has initiated enhanced utilization of the alternative tracker mechanism to improve electric reliability. The utility reported over 1,120 active transmission requests, indicating rising demand across its service area, which will require further infrastructure bolstering.

Sustainability and Future Outlook

Sempra continues to demonstrate its commitment to safe and reliable energy delivery. Particularly, Sempra California is concentrating efforts on connecting around 25 million consumers to affordable energy. With recent investments exceeding $1.2 billion, Sempra is working towards modernizing energy networks to meet rising future demands.

In summary, while Sempra is navigating some financial challenges reflected in lower GAAP earnings compared to last year, the company remains resolute in its strategic focus on capital rotation and value creation initiatives. Their goal is to adapt and thrive in an ever-demanding energy landscape, ensuring that they maintain their standing as a leader in North America's energy infrastructure sectors.

For more insights and ongoing updates, viewers can join the live broadcast discussing Sempra’s earnings results at noon ET, accessible via the Investors section on Sempra's website.