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Sempra Energy Set to Report Q1 Earnings: What's in the Offing?

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Sempra Energy (SRE - Free Report) is scheduled to release its first-quarter 2025 results on May 8, before market open.

The company delivered a negative earnings surprise of 7.98% in the last reported quarter. Moreover, SRE has a negative four-quarter average earnings surprise of 7.01%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.

Factors at Play Ahead of SRE’s Q1 Results

The majority of SRE’s service territories experienced warmer-than-normal temperature patterns in the first two months of the January-March quarter, and a near-average temperature pattern prevailed in March. Warmer temperatures are likely to have hurt electricity demand from its customers for heating purposes this winter, adversely affecting the company’s top-line performance. However, near-average temperature might have a moderate impact on SRE’s overall revenues.

The destructive Palisades and Eaton wildfires affected huge parts of California this January. This, along with snowstorms, heavy rainfall, landslides and floods that hit SRE’s service areas, is likely to have caused outages for some of SRE’s customers, hurting the company’s revenues.

Nevertheless, rising electricity demand from California, backed by increasing infrastructure investments, customer growth and surging LNG demand, must have boosted the company’s overall top-line performance.

From a cost perspective, the aforementioned adverse weather events might have caused infrastructural damage to Sempra Energy, increasing the company’s operation and maintenance (O&M) expenses to repair the damage. This, along with higher insurance premiums, decreased consumption patterns expected from Texas and lower income tax benefits, is likely to have negatively impacted the company’s bottom-line performance.

Further, it is imperative to mention that the California rate case decision, which came in late December 2024, was below SRE’s planning assumptions and thus caused its management to lower its 2025 earnings expectation. In line with this, we may expect this unfavorable regulatory decision to have played the role of a growth inhibitor for SRE’s first-quarter earnings as well.

However, solid sales expectations and favorable returns from previous investments might have aided SRE’s earnings to some extent.

Sempra Energy Price and EPS Surprise

Sempra Energy Price and EPS Surprise

Sempra Energy price-eps-surprise | Sempra Energy Quote

SRE’s Q1 Expectations

The Zacks Consensus Estimate for SRE’s sales is pegged at $3.85 billion, which indicates year-over-year growth of 5.7%.

The Zacks Consensus Estimate for earnings is pegged at $1.21 per share, which suggests a year-over-year decline of 9.7%.

What Our Model Predicts for SRE

Our proven model does not conclusively predict an earnings beat for SRE this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as you will see below.

Earnings ESP: SRE has an Earnings ESP of +11.05%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Sempra Energy carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are three companies from the same sector that have the right combination of elements to post an earnings beat this reporting cycle.

Centuri Holdings, Inc. (CTRI - Free Report) is set to report its first-quarter 2025 results on May 7, before market open. It has an Earnings ESP of +25.00% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for first-quarter sales is pegged at $530.5 million, which calls for a 0.5% improvement from the year-ago quarter’s figure. The consensus estimate for first-quarter earnings is pegged at a loss of 16 cents per share.

Fortis (FTS - Free Report) is set to report its first-quarter 2025 results on May 7, before market open. It has an Earnings ESP of +1.23% and a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for first-quarter sales is pegged at $2.38 billion, which calls for a 2.9% improvement from the year-ago quarter’s figure. The consensus estimate for first-quarter earnings stands at 69 cents per share.

Alliant Energy (LNT - Free Report) is set to report first-quarter earnings on May 8, after market close. It has an Earnings ESP of +9.88% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for first-quarter sales is pegged at $1.13 billion, which indicates a 9.2% improvement from the year-ago quarter’s figure. The consensus estimate for first-quarter earnings stands at 57 cents per share.

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