Sempra Energy’s SRE second-quarter 2015 adjusted earnings per share came in at $1.03, ahead of the Zacks Consensus Estimate of 95 cents by 8.4%. Earnings, however, declined 4.6% from $1.08 per share in the prior-year quarter, primarily due to seasonal adjustment at the company’s subsidiary Southern California Gas Co. (SoCalGas).
Including the benefit from the sale of the second block of Sempra U.S. Gas & Power's Mesquite Power facility and considering liquefied natural gas (“LNG”) development expenses, GAAP earnings were $1.17 per share in the quarter compared with $1.08 a year ago.
Total Revenues
In the quarter under review, total revenues were $2,367 million, down 11.6% year over year due to lower revenues at energy-related businesses (down 24% year over year) and utilities (down 10%). The quarterly figure also missed the Zacks Consensus Estimate of $2,676 million by 11.5%.
Segment Update
San Diego Gas & Electric (SDG&E): Quarterly earnings were $126 million compared with $123 million in the year-ago quarter.
Southern California Gas Company (SoCalGas): The segment generated earnings of $70 million, down from $80 million in second-quarter 2014. The downward movement mainly reflects seasonality of revenues that had a $48 million negative impact for the quarter.
Sempra South American Utilities: The segment recorded earnings of $45 million in the second quarter, up from $42 million in the prior-year period.
Sempra Mexico: The segment recorded earnings of $50 million, up from $34 million in second-quarter 2014. The improvement primarily reflects higher pipeline revenues.
Sempra Renewables: The segment recorded quarterly earnings of $19 million, up from $18 million a year ago.
Sempra Natural Gas: The segment earned $40 million in the second quarter compared with $4 million in the prior-year period owing to a $36 million after-tax gain related to the sale of the second block of the Mesquite Power generating facility.
Financial Update
As of Jun 30, 2015, Sempra Energy’s cash and cash equivalents were $636 million, compared with $570 million as of Dec 31, 2014.
Long-term debt was $12,626 million as of Jun 30, 2015 compared with $12,167 million at 2014 end.
In the quarter, cash flow from operating activities was $1,219 million in the first half of 2015, up from $1,034 million in the year-ago period.
In the second quarter, the company’s capital expenditures and investments were $813 million compared with $860 million in the prior-year period.
Guidance
Sempra Energy reaffirmed its 2015 adjusted earnings guidance of $4.60 to $5.00 per share.
Peer Releases
PG&E Corp.’s PCG adjusted operating earnings per share of 91 cents in the second quarter of 2015 outpaced the Zacks Consensus Estimate of 77 cents by 18.2%. The reported figure also surged 31.9% from the year-ago earnings.
CMS Energy Corp. CMS reported second-quarter 2015 adjusted earnings per share of 25 cents, missing the Zacks Consensus Estimate of 33 cents by 24.2%. Quarterly earnings also declined 16.7% from the year-ago figure primarily due to lower revenues.
American Electric Power Co., Inc. AEP reported second-quarter 2015 operating earnings of 88 cents per share, beating the Zacks Consensus Estimate of 81 cents by 8.6%.
Zacks Rank
Sempra Energy currently has a Zacks Rank #3 (Hold).
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