Sempra 2025 Q2 Earnings Earnings Drop as Net Income Falls 40.4%

Sempra reported mixed second-quarter earnings results with a notable decline in net income. The company’s GAAP earnings came in at $0.71 per share, missing the prior year's $1.12, while adjusted earnings were $0.89, matching the same period in 2024. Sempra updated its 2025 full-year guidance, narrowing the GAAP EPS range and maintaining its adjusted EPS outlook. The company also affirmed its long-term EPS growth targets.

Revenue
Sempra's total revenue slightly declined to $3 billion in 2025 Q2, representing a 0.4% drop from the $3.01 billion recorded in 2024 Q2. The performance was driven by Sempra California, which contributed $2.49 billion in revenue. Sempra Infrastructure added $530 million, while intersegment revenues showed a minor negative adjustment of $20 million.

Earnings/Net Income
Sempra’s net income fell 40.4% year-over-year to $519 million in 2025 Q2, compared to $871 million in 2024 Q2. Earnings per share dropped significantly by 37.2% to $0.71 from $1.13. Despite these declines, the company has maintained profitability for over two decades, demonstrating operational resilience.

Price Action
Sempra’s stock gained traction in the post-earnings period. The shares rose 1.35% in the latest trading day and 11.13% month-to-date. However, the 30-day buy-and-hold strategy after earnings did not outperform the market, yielding a 14.75% return versus 85.29% for the benchmark.

Post-Earnings Price Action Review
The buy-and-hold strategy following Sempra’s earnings was characterized by moderate returns and low volatility. While it delivered a 14.75% return over 30 days, it significantly underperformed the market's 85.29% benchmark. The strategy's Sharpe ratio of 0.13 indicates a modest risk-adjusted return, with a maximum drawdown of 0% and volatility of 22.45%. These factors suggest a low-risk approach suitable for conservative investors, though the CAGR of 2.85% highlights limited growth potential compared to broader market performance.

CEO Commentary
Jeffrey W. Martin, Chairman and CEO of Sempra, remarked on a “solid quarter” and the disciplined execution of value creation initiatives. He emphasized the company's shift toward a more utility-centric business model. Martin also highlighted progress on key initiatives, including capital recycling through the sale of equity at Sempra Infrastructure and Ecogas México, both expected to close in Q2 or Q3 2026.

Guidance
Sempra updated its full-year 2025 GAAP earnings-per-share guidance range to $4.05 to $4.45, reflecting actual results through the second quarter. The company affirmed its full-year 2025 adjusted EPS guidance range at $4.30 to $4.70 and its 2026 EPS guidance range of $4.80 to $5.30. Additionally, Sempra reaffirmed its long-term EPS compound annual growth rate of 7% to 9% for 2025 through 2029.

Additional News
Sempra is actively advancing its 2025 value creation initiatives, particularly in capital recycling. The company has extended the right of first offer process for its Sempra Infrastructure equity and signed a non-binding letter of intent with KKR. The sale of Ecogas México also continues to attract strong buyer interest. In Texas, Oncor Electric filed for a base rate review expected to finalize in Q1 2026. In California, Sempra California’s utilities are investing heavily in infrastructure and pursuing cost-saving measures to enhance efficiency. The company is also progressing on significant construction projects and has received regulatory approvals for its Port Arthur LNG Phase 2 development.