Sempra's Q4 2024 Earnings Call: Contradictions in Growth Outlook, Project Delays, and Texas Investment Impact

These are the key contradictions discussed in Sempra's latest 2024Q4 earnings call, specifically including: Long-term Growth Expectations and Capital Allocation, ECA Project Delays and Financial Guidance, and Texas Investment and Earnings Impact:



Capital Investment and Growth Strategy:
- Sempra announced a new record $56 billion capital plan for 2025 to 2029, representing a 16% increase over the prior plan, with over 90% allocated to regulated utilities.
- This growth is driven by opportunities in Oncor, which expects to double its rate base by 2029.

Oncor's Expansion and Rate Base Growth:
- Oncor is planning $36 billion in investments over 2025 to 2029, focusing on transmission and distribution upgrades, with 60% of the capital devoted to transmission projects.
- The company anticipates continued strong annual premise growth and an increase in interconnection requests, supporting infrastructure investments and economic expansion in Texas.

Sempra Infrastructure and LNG Projects:
- Sempra Infrastructure is focusing on its dual-basin LNG strategy, with several LNG projects in various stages of development, including ECA LNG Phase 1 and Port Arthur LNG Phase 1.
- The company is confident in its ability to deliver recurring cash flows, with over 18 years of average contract life remaining for its assets.

Earnings and Financial Guidance:
- Sempra revised its 2025 EPS guidance range to $4.30 to $4.70, based on changes in assumptions and planning decisions, such as Oncor's expected base rate review.
- Despite the revised guidance, Sempra is confident in its long-term growth, raising its projected long-term EPS growth rate to 7% to 9%.