Business
Sempra Energy Faces Uncertain Earnings Ahead of Q1 Results
SAN DIEGO, Calif. — Sempra Energy (SRE) will release its first-quarter 2025 results on May 8, before the market opens. Last quarter, Sempra reported a negative earnings surprise of 7.98%, marking a four-quarter average surprise of 7.01%.
Several factors have impacted SRE’s performance during the January-March quarter. Most of its service areas experienced unusually warm temperatures, which likely reduced electricity demand for heating during winter months. While warmer-than-normal conditions persisted through February, March saw near-average temperatures.
The severe Palisades and Eaton wildfires, alongside heavy rainfall, snowstorms, and landslides in California during January also adversely affected customer service, potentially leading to outages. These events might have negatively impacted Sempra’s revenue during the quarter.
Despite these challenges, there are signs of increased electricity demand in California attributed to expanding infrastructure investments and a growing customer base. Additionally, rising demand for liquefied natural gas could bolster the company’s top-line performance.
Cost-wise, adverse weather and resulting infrastructural damage may have increased Sempra’s operation and maintenance expenses. Higher insurance premiums and lower expected consumption patterns from Texas further complicate the cost landscape.
A rate case decision in December 2024, which was unfavorable compared to Sempra’s expectations, led management to adjust its earnings outlook for 2025, contributing to a muted earnings performance outlook.
The Zacks Consensus Estimate anticipates Sempra’s revenues for the upcoming quarter will reach $3.85 billion, reflecting a 5.7% year-over-year increase. However, the earnings projection stands at $1.21 per share, signaling a year-over-year decline of 9.7%.
Our model suggests it is unlikely that Sempra will achieve an earnings beat this quarter, presently reflecting an Earnings ESP of +11.05% but holding a Zacks Rank of #4 (Sell).
