Sempra Energy Results Improve

Sempra Energy Reports Improved FY’08 Results

Sempra Energy (SRE - Analyst Report) announced financial results for its 4th quarter and full-year ended December 31, 2008.  Net income for the reported quarter increased 10.4% to $319 million, or $1.30 per diluted share ($1.32 basic), compared to $289 million, or $1.10 per diluted share ($1.12 basic), in the prior-year quarter. Quarterly income from continuing operations increased 10.8% to $319 million, or $1.30 per diluted share ($1.32 basic) in the reported quarter versus $288 million, or $1.10 per diluted share ($1.12 basic) in the year-ago period.

For fiscal 2008, income from continuing operations was $4.43 per diluted share, up 4.0% per share, compared to $4.26 per diluted share for fiscal 2007. Likewise, net income increased 1.3%, to $1.11 billion or $4.43 per diluted share in fiscal 2008 versus $1.10 billion or $4.16 per diluted share for fiscal 2007.

The Company also reaffirmed its earnings guidance for fiscal 2009 to a range of $4.35 to $4.60 per share.

Looking ahead, a base of stable earnings, steady progress at its LNG terminals, regulatory approval of utility rate cases and the Sunrise Powerlink transmission line, operational REX-West and completion of its first solar power project, collectively support the bullish outlook for SRE.

Furthermore, given a discount in P/E multiples, we maintain our BUY recommendation on SRE with a 6-month target price of $45.50. Price appreciation to our near-term valuation target -- coupled with a sustainable and secure, recently increased quarterly dividend of $0.39 per share based on low projected earnings payouts -- represents annualized total return potential of 23.9%.

Sempra Energy is an energy services utility holding company. The Company, through its business units, provides electric, natural gas and other energy products and services.

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