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01/11 10:25
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call indicates a positive outlook with increased dividends and a robust capital plan. Adjusted earnings showed significant growth, and the company expects high growth rates in Texas. Despite some challenges, the management's responses in the Q&A suggest confidence in overcoming them. The consistent dividend increase and share repurchase plan further support a positive sentiment.
Adjusted EPS $4.65, an increase from $4.61 (1% year-over-year increase) due to higher electric transmission margin and income tax benefits.
GAAP Earnings (Q4 2024) $665 million or $1.04 per share, a decrease from $737 million or $1.16 per share (9% year-over-year decrease) due to various operational challenges.
Adjusted Earnings (Q4 2024) $960 million or $1.50 per share, an increase from $719 million or $1.13 per share (33% year-over-year increase) driven by improved operational performance.
Full Year GAAP Earnings $2,817 million or $4.42 per share, a decrease from $3,030 million or $4.79 per share (7% year-over-year decrease) due to increased interest expenses and operational challenges.
Full Year Adjusted Earnings $2,969 million or $4.65 per share, an increase from $2,920 million or $4.61 per share (2% year-over-year increase) due to higher electric transmission margin and income tax benefits.
Capital Plan (2025-2029) $56 billion, a 16% increase over the prior plan, driven by growth opportunities in Texas.
Rate Base (2024) $56 billion, projected to grow to over $91 billion by 2029, representing a 10% compounded annual growth rate.
Oncor Capital Plan (2025-2029) $36 billion, a 50% increase over the previous five-year plan, driven by strong customer growth and interconnection requests.
Utility Rate Base $56 billion, with expectations to grow significantly due to increased investments in infrastructure.
Dividends Increased to $2.58 per share, marking the 15th consecutive year of dividend increases.
New Capital Plan for 2025-2029: Sempra announced a new record capital plan of $56 billion for 2025 to 2029, a 16% increase over the prior plan, with over half of the new capital driven by opportunities at Oncor.
Oncor's Base Rate Review: Oncor is preparing to file a comprehensive base rate review this year to strengthen its financial position and support expected growth in energy demand.
Texas Population Growth: Texas added over half a million new residents from July 2023 to July 2024, indicating strong economic and population growth, which is expected to nearly double electricity demand by the end of the decade.
Sempra Texas Growth: Sempra Texas is projected to account for over half of Sempra's earnings by the end of the decade, reflecting a strategic shift towards higher exposure to U.S. investments and regulated utilities.
Operational Investments: Sempra deployed nearly $10 billion of capital across its three business lines in 2024, with a utility rate base of $56 billion.
Oncor's Infrastructure Investments: Oncor deployed approximately $4.7 billion in 2024, growing its rate base by approximately 15% and investing in 4,300 miles of T&D lines.
Sempra Infrastructure Projects: Sempra Infrastructure is advancing construction on ECA LNG Phase 1 and Port Arthur LNG Phase 1, targeting commercial operations in 2026.
Long-term EPS Growth Rate: Sempra raised its long-term EPS growth rate to 7% to 9%, reflecting confidence in future growth driven by investments in Texas.
Dividend Increase: Sempra's Board approved an increase in the company's annualized dividend to $2.58 per share, marking the 15th consecutive year of dividend increases.
Competitive Pressures: Sempra faces competitive pressures in the energy sector, particularly in Texas, where the demand for electricity is expected to nearly double by the end of the decade. This necessitates significant capital investments to meet the growing energy needs.
Regulatory Issues: Oncor is preparing to file a comprehensive base rate review, which could impact earnings due to regulatory lag. Additionally, the California GRC decision was below planning assumptions, affecting expected returns.
Supply Chain Challenges: The company has expanded its supplier base and inventory stock to ensure materials are available for infrastructure projects, indicating potential supply chain challenges in meeting the growing demand.
Economic Factors: Higher interest rates, inflationary pressures, and changing market conditions are impacting Sempra's financial forecasts and capital planning, particularly in relation to Oncor's base rate review.
Wildfire Risk: Sempra California has made significant investments in wildfire mitigation, but ongoing risks remain due to California's wildfire history, which could impact operational stability and costs.
Interest Rate Risks: The company has noted higher interest expenses due to increased capital investments, which could affect overall financial performance.
Five-Year Capital Plan: Sempra announced a new record capital plan of $56 billion for 2025 to 2029, a 16% increase over the prior plan, with over half of the new capital driven by opportunities at Oncor.
Long-Term EPS Growth Rate: Sempra raised its projected long-term EPS growth rate to 7% to 9%.
Oncor's Capital Investments: Oncor is preparing to file a comprehensive base rate review to strengthen its financial position and support expected growth in energy demand.
Infrastructure Investments: Sempra Infrastructure is advancing construction on large-scale projects including ECA LNG Phase 1 and Port Arthur LNG Phase 1.
2025 EPS Guidance: Revised EPS guidance range for 2025 is $4.30 to $4.70.
2026 EPS Guidance: Projected EPS range for 2026 is $4.80 to $5.30.
2024 Rate Base Growth: Projected total rate base of $56 billion in 2024, expanding to over $91 billion by 2029, reflecting a 10% compounded annual growth rate.
Dividend Increase: Sempra's Board approved an increase in the annualized dividend to $2.58 per share, marking the 15th consecutive year of dividend increases.
Annual Dividend: Sempra's Board of Directors approved an increase in the company's annualized dividend for the 15th consecutive year to $2.58 per share.
Share Repurchase Program: The plan presented includes share repurchases on the back end of the capital plan.
The earnings call highlights strong financial performance, ambitious capital investment plans, and optimism about future growth, especially in Texas. Affirmed EPS guidance and the commitment to maintaining a strong balance sheet are positive indicators. However, uncertainties in regulatory discussions and the SIP transaction leakage are concerns. Overall, the positive aspects, particularly the strategic focus on Texas and robust growth plans, outweigh the negatives, suggesting a positive stock price movement.
The earnings call shows positive sentiment with strong financial metrics, strategic investments, and optimistic guidance. The company plans significant infrastructure investments and portfolio realignment for growth. Customer affordability initiatives and potential equity sales with KKR indicate a focus on maximizing value. The Q&A reveals management's strategic flexibility and confidence in growth opportunities, despite some lack of specifics. The positive aspects outweigh uncertainties, suggesting a stock price increase.
Sempra's earnings call shows mixed signals. The affirmation of EPS guidance and strong financial results are positive, but regulatory risks and operational incidents pose concerns. The Q&A revealed management's reluctance to provide clear guidance on key issues, which may unsettle investors. The absence of a share buyback program or dividend increase limits positive catalysts. Overall, the sentiment is neutral, as positive financial performance is offset by regulatory and operational risks, and lack of shareholder return initiatives.
The earnings call indicates a positive outlook with increased dividends and a robust capital plan. Adjusted earnings showed significant growth, and the company expects high growth rates in Texas. Despite some challenges, the management's responses in the Q&A suggest confidence in overcoming them. The consistent dividend increase and share repurchase plan further support a positive sentiment.
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