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Sempra Energy (SRE) Q2 Earnings Miss, Revenues Improve Y/Y

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Sempra Energy’s (SRE - Free Report) second-quarter 2019 adjusted earnings per share (EPS) came in at $1.10, which missed the Zacks Consensus Estimate of $1.19 by 7.8%. The bottom line also declined 18.5% from $1.35 registered in the prior-year quarter.

Barring one-time items, the company generated GAAP earnings of $1.26 per share against a loss of $2.11 incurred in second-quarter 2018. This year-over-year downside can be attributed to the absence of benefits from its U.S. solar, wind and certain non-utility natural gas storage assets, which the company sold this April.

Total Revenues

In the quarter under review, total revenues of $2,230 million increased 2.5% year over year on higher contributions from its Utilities (up 4.1%) business. The top line, however, missed the consensus mark of $2,318 million by 3.8%.

Sempra Energy Price, Consensus and EPS Surprise

Sempra Energy Price, Consensus and EPS Surprise

Sempra Energy price-consensus-eps-surprise-chart | Sempra Energy Quote

Segment Update

San Diego Gas & Electric (SDG&E): Quarterly earnings amounted to $143 million compared with the year-ago quarter’s $146 million.

Southern California Gas Company (SoCalGas): At this segment, quarterly earnings totaled $30 million in the second quarter of 2019 compared with $33 million registered in the prior-year quarter.

Sempra Texas Utility: Earnings at this segment came in at $113 million in the reported quarter compared with $114 million in the year-ago quarter.

Sempra Mexico: The segment recorded net earnings of $73 million compared with $97 million in the year-ago quarter.

Sempra Renewables: The segment recorded net quarterly earnings of $43 million against a loss of $109 million incurred in the second quarter of 2018.

Sempra LNG: The segment reported earnings of $6 million against the year-ago quarter’s loss of $764 million.

Parent and Other: Quarterly loss at this division rose to $127 million from the year-ago quarter’s loss of $126 million.

Financial Update

As of Jun 30, 2019, Sempra Energy’s cash and cash equivalents totaled $168 million compared with $102 million as of Dec 31, 2018.

Long-term debt and finance leases amounted to $21,199 million as of Jun 30, 2019, compared with $20,903 million at 2018 end.

Cash flow from operating activities was $1,704 million at the end of second-quarter 2019, up from $1,673 million at the end of second-quarter 2018.

In the reported quarter, the company’s total capital expenditures, investments and acquisitions summed $2,165 million compared with $1,061 million in the second quarter of 2018.

Highlights of the Quarter

To enhance its LNG development projects, Sempra LNG signed a heads of agreement (HOA) with Aramco Services Company in May. The HOA anticipates the negotiation and finalization of a definitive 20-year LNG sale-and-purchase agreement for 5 million tonnes per annum of LNG offtake from the Port Arthur LNG export project under development.

Moreover, the company bought an indirect 50% limited-partnership interest in Sharyland Utilities, while its Oncor division acquired InfraREIT this May.

2019 Guidance

Sempra Energy reaffirmed its earnings guidance for 2019. The company still expects to generate earnings of $5.70-$6.30. The Zacks Consensus Estimate for full-year earnings stands at $6.02, above the midpoint of the company projected view.

Zacks Rank

Sempra Energy has a Zacks Rank #4 (Sell).

Recent Utility Releases

CMS Energy Corporation’s (CMS - Free Report) second-quarter 2019 adjusted earnings per share (EPS) of 33 cents declined 32.7% year over year. The bottom line also missed the Zacks Consensus Estimate of 44 cents by 25%. The company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NextEra Energy, Inc. (NEE - Free Report) reported second-quarter 2019 adjusted earnings of $2.35 per share, beating the Zacks Consensus Estimate of $2.28 by 3.1%. Moreover, the bottom line improved 12.9% on a year-over-year basis. This company also carries a Zacks Rank #3.

FirstEnergy Corporation (FE - Free Report) delivered second-quarter 2019 operating earnings of 61 cents per share, which outpaced the Zacks Consensus Estimate of 60 cents by 1.67%. However, the reported figure decreased 1.61% from the year-ago quarter’s 62 cents. The company carries a Zacks Rank of 3.

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