Sempra Energy Q4 Earnings Call Highlights

• Sempra reported record adjusted EPS of $4.69 for 2025 (at the high end of guidance) and issued updated targets of $4.80–$5.30 for 2026, $5.10–$5.70 for 2027 and a $6.70–$7.50 outlook for 2030.

• The company unveiled a $65 billion capital plan for 2026–2030 (≈95% utility-focused) led by Sempra Texas/Oncor transmission, projecting rate base growth from $57 billion in 2025 to $97 billion by 2030 and saying operating cash flow plus transaction proceeds should eliminate the need for new common equity for the base plan.

• Sempra expects to close the sale of a 45% stake in SI Partners for $10 billion (implying >$22 billion equity value) in Q2–Q3 2026 while retaining a 25% residual stake (~$5.5 billion implied); management said the proceeds are central to strengthening the balance sheet, could enable deconsolidation of SI Partners debt, and would shift the business to roughly 95% regulated earnings after closing.

• Interested in Sempra Energy? Here are five stocks we like better.

Sempra Energy (NYSE:SRE) executives used the company’s fourth-quarter 2025 earnings call to outline progress on several portfolio and financing initiatives, report full-year results that landed at the high end of guidance on an adjusted basis, and introduce a larger five-year capital plan alongside new long-term earnings targets.

Chairman and CEO Jeff Martin said 2025 results reflected execution against five initiatives intended to simplify the business model, mitigate risk, and improve financial strength. He highlighted $13 billion of capital deployed during the year and said the company achieved record adjusted earnings per share (EPS) of $4.69 for 2025, at the high end of the company’s guidance range.

→ Diamondback Sees Resilient Demand Despite Cautious Guidance

Among the initiatives discussed:

• Prioritizing utility investments with improved returns: Martin cited higher CPUC-based operating margin at Sempra California and improved capital efficiency at Oncor through the Unified Tracker Mechanism.

• Highlighting value in LNG: The company announced in September the sale of a 45% stake in SI Partners for $10 billion, implying more than $22 billion of equity value. Management said it still expects to close the transaction in the second or third quarter of 2026, subject to conditions. Sempra Infrastructure also declared FID on Port Arthur LNG phase II and reached mechanical completion at ECA LNG phase I, while noting Port Arthur LNG phase I remains on track for COD at or near the end of 2027.

• Simplifying and reducing Mexico portfolio risk: Management said SI Partners agreed in December to sell Ecogas for the equivalent of approximately $500 million, at an implied 12.7x EBITDA multiple, with closing expected in the second or third quarter of 2026, subject to conditions.

• Fit for 2025 cost program: Martin said the company reduced its cost structure and modernized its workforce, while adding that more work remains and will continue in 2026.

• Safety and operational excellence: Martin pointed to California’s passage of SB-254, which he said strengthened the long-term stability of the state’s wildfire fund and called for additional reductions in wildfire risk exposures through a Natural Catastrophe Resiliency Study expected in April 2026. He also said SDG&E was recognized for electric customer reliability for the 20th consecutive year.

CFO Karen Sedgwick reported fourth-quarter 2025 GAAP earnings of $352 million, or $0.54 per share, compared with $665 million, or $1.04 per share, in the prior-year quarter. For full-year 2025, the company posted GAAP earnings of $1.796 billion, or $2.75 per share, compared with $2.817 billion, or $4.42 per share, for 2024.

→ AI Is Separating Software Winners From Losers, 2 Experts Explain

On an adjusted basis, Sedgwick said fourth-quarter 2025 earnings were $841 million, or $1.28 per share, compared with $960 million, or $1.50 per share, in the year-ago quarter. Full-year 2025 adjusted earnings were $3.066 billion, or $4.69 per share, up from $2.969 billion, or $4.65 per share, in 2024.

Discussing year-over-year drivers in full-year adjusted earnings, Sedgwick cited:

• Sempra Texas: $80 million of higher equity earnings from the UTM, higher invested capital, and customer growth, partially offset by higher interest expense, depreciation, and O&M.

• Sempra California: a $213 million impact primarily from lower income tax benefits and higher net interest expense, alongside $148 million of higher CPUC-based operating margin net of items including operating expenses and a lower cost of capital. Sedgwick noted that fourth-quarter and full-year 2024 results reflected the recognition of two years’ worth of income tax benefits from the prior year’s GRC final decision.

• Sempra Infrastructure: $123 million primarily from higher asset and supply optimization, higher transportation results, and lower depreciation on assets held for sale, partially offset by lower income tax benefits.

• Sempra Parent: $41 million of higher losses tied to higher net interest expense, partially offset by higher income tax benefit, higher investment gains, and other items.

→ NVIDIA’s AI Boom Isn’t Slowing After Blowout Q4

Sedgwick introduced a $65 billion capital plan for 2026-2030, an increase of $9 billion versus the prior plan, with 95% targeted for utility investments. She said the plan was driven primarily by growth at Sempra Texas, including acceleration of the Permian Basin Reliability Plan.

Management emphasized a conservative approach for Oncor’s base plan, adding major transmission projects with existing regulatory approvals and those included in the Permian Plan. Sedgwick said Oncor is expected to build more than half of ERCOT’s estimated $32 billion to $35 billion in required transmission investment, with nearly 70% of Oncor’s planned CapEx dedicated to transmission.

The company also described incremental opportunities at Oncor. Sedgwick said management is tracking $10 billion of incremental capital opportunities at Oncor, or $8 billion based on Sempra’s ownership share, including portions of the 765kV Strategic Transmission Expansion Plan, additional transmission upgrades pending ERCOT approval, potential System Resiliency Plan updates, and certain LC&I interconnections. In Q&A, management clarified the $9 billion figure referenced elsewhere reflected Sempra’s ownership share relative to the $10 billion total opportunity at Oncor.

Sedgwick said Sempra projects overall rate base to increase from $57 billion in 2025 to $97 billion in 2030, an 11% five-year CAGR. She projected Sempra Texas rate base growth of 18% CAGR over the period, while California rate base growth is expected to be more modest. Management expects Sempra Texas to surpass Sempra California as the majority of rate base by 2030.

On funding, Sedgwick said more than $50 billion from operating cash flow and expected transaction proceeds eliminates the need for new common equity issuances to fund the base capital plan. She said operating cash flows are expected to be the predominant funding source, noting operating cash flow projections increased by about $5 billion versus last year’s plan. She also referenced an additional $2.2 billion of cash expected from the SI Partners transaction beyond the 2030 planning period and said Sempra will retain a 25% residual stake in SI Partners with an implied equity value of approximately $5.5 billion.

Regarding credit, Sedgwick and Martin said the pending SI Partners transaction is central to strengthening the balance sheet and maintaining investment-grade ratings. Sedgwick said after closing, regulated earnings are expected to comprise approximately 95% of the business in 2027 and beyond, and the company may have the opportunity to deconsolidate SI Partners debt. Management said it is targeting 50-150 basis points of cushion on average above FFO-to-debt thresholds over the plan period after closing, and noted ongoing discussions with rating agencies.

The company also updated its earnings targets, affirming 2026 adjusted EPS guidance of $4.80 to $5.30, introducing 2027 EPS guidance of $5.10 to $5.70, and issuing a 2030 EPS outlook of $6.70 to $7.50. In Q&A, Martin said key variables influencing the long-term outlook include regulatory matters, including the 2028 general rate case (GRC) in California, and progress in moving identified “upside” capital into the base plan, particularly in 2028-2030.

Martin also reiterated a dividend growth target of 2% to 4% annually over the plan period and said the company expects investor engagement to be a priority, with planned travel to conferences and meetings in March and April.

Sempra Energy is a San Diego–based energy infrastructure company that develops, owns and operates businesses delivering electricity and natural gas. Its operations include regulated utility services that provide electric and gas distribution to residential, commercial and industrial customers, as well as non‑regulated infrastructure businesses that develop and manage large-scale energy assets.

The company’s product and service portfolio spans electricity and natural gas delivery, transmission and storage, liquefied natural gas (LNG) facilities, power generation and electric transmission projects.

The article “Sempra Energy Q4 Earnings Call Highlights” was originally published by MarketBeat.