Sempra Shares Plummet on Disappointing Q4 Earnings

Sempra (NYSE: SRE) shares took a nosedive on Tuesday, February 25, 2025, following the release of the company's fourth-quarter and full-year 2024 earnings results. The utility giant reported adjusted earnings per share (EPS) of $1.50 for the fourth quarter, missing analysts' estimates of $1.60. Revenue of $3.758 billion also fell short of the consensus of $4.36 billion. Natural gas revenues rose to $2.34 billion from $1.935 billion, while electric revenue increased to $1.027 billion from $1.003 billion. However, energy-related business revenue declined to $388 million from $553 million a year ago.



The company's full-year 2024 adjusted EPS was $4.65, compared to the annual estimate of $4.75. Sempra also lowered its 2025 EPS guidance to a range of $4.30 to $4.70, from a previous range of $4.90 to $5.25. The company issued 2026 EPS guidance of $4.80 to $5.30, representing a 12% year-over-year increase from the midpoint of the 2025 guidance. Additionally, Sempra raised its projected long-term EPS growth rate to 7% to 9%.



Sempra's disappointing Q4 earnings can be attributed to several factors, including regulatory disallowances, the retroactive impact of the 2024 General Rate Case Final Decision, the impact from foreign currency and inflation on monetary positions in Mexico, net unrealized losses on derivatives, and the impact from foreign tax credit valuation allowance. These factors contributed to the company's earnings miss and may impact future performance if not addressed.

Jeffrey W. Martin, chairman and CEO of Sempra, stated, "With the reset of our guidance in 2025, we are setting a new foundation for a decisive decade of growth. We are also announcing a record five-year capital plan of $56 billion and raising the company's long-term EPS growth rate to 7%-9%. Over half of planned capital expenditures are earmarked for Texas, where significant new investments are needed to expand and modernize the energy grid. This is consistent with Sempra's 2030 aspirations of producing over 50% of its earnings from the State of Texas."



In conclusion, Sempra's shares plummeted on disappointing Q4 earnings results, with the company missing analysts' estimates for EPS and revenue. The utility giant's revised EPS guidance and increased long-term EPS growth rate reflect the company's strategic priorities and long-term growth prospects. However, investors should closely monitor the factors contributing to the earnings miss and the company's ability to address these challenges to ensure a strong financial position in the future.