DBA Sempra
SRE · NYSE
Next quarter
Reports Nov 4, 2026.
Consensus is $1.11 EPS for Sep 2026 across 4 estimates, ranging $1.00 to $1.21.
SRE Jun 2026
- 14.85%
- $1.01
- $1.16
- —
- —
Highlights
- Earnings beat Adjusted EPS was $1.16 versus consensus of $1.01, a 14.85% surprise; adjusted earnings rose 31% from $0.89 a year earlier.
- GAAP improvement GAAP EPS was $1.21 and GAAP earnings were $796 million, versus $0.71 and $461 million in Q2 2025.
- Utility-led growth Segment earnings increased to $873 million from $539 million, led by Texas Utilities at $346 million versus $208 million and Infrastructure at $230 million versus $72 million.
- Quarterly comparison GAAP EPS declined from $1.58 in Q1 2026 to $1.21, while net income fell from $1.04 billion to $942 million; the second quarter remains substantially above Q2 2025.
- Texas demand Oncor deliveries rose 5.6% year over year to 44,595 million kWh, while ERCOT set a 91 GW all-time peak load in July.
- Large-load opportunity Approximately 44 GW of large-load requests in Oncor’s territory could be eligible for the new interconnection process, versus Oncor’s current 31 GW system peak.
- Capital deployment Sempra deployed $6.1 billion in the first half, including $4.7 billion of property, plant and equipment spending, against a 2026–2030 capital plan of approximately $64.9 billion.
- Guidance Full-year 2026 GAAP EPS guidance was updated to $5.02–$5.55; adjusted EPS guidance remained $4.80–$5.30, with 2027 EPS guidance of $5.10–$5.70 reaffirmed.
- Portfolio simplification The sale of a 45% interest in Sempra Infrastructure Partners to KKR remains on track for Q3 2026, while the Ecogas México sale is expected to close in August.
Analysis
Sempra’s second quarter was a strong earnings print against both expectations and the year-ago period, though it moderated sequentially from an unusually strong first quarter. Adjusted EPS of $1.16 exceeded the $1.01 consensus by 14.85% and increased from $0.89 in Q2 2025. GAAP EPS was $1.21 versus $0.71 a year ago, with GAAP earnings rising to $796 million from $461 million. Compared with Q1 2026, GAAP EPS fell from $1.58 and net income declined from $1.04 billion to $942 million. Revenue was essentially flat year over year at $3.00 billion, versus $3.43 billion in Q1.
The defining feature was broad earnings growth across the operating portfolio. Texas Utilities earnings rose 66% to $346 million, California increased 15% to $297 million, and Infrastructure rose to $230 million from $72 million, lifting segment earnings 62% to $873 million. Sempra also emphasized the scale of its utility investment opportunity: first-half capital deployed reached $6.1 billion, while the $64.9 billion five-year plan is 95% allocated to Texas and California. Oncor’s rate reset and Texas load growth support that plan, while the pending KKR and Ecogas transactions advance the company’s stated simplification and capital-recycling strategy. Sempra updated GAAP guidance but held adjusted 2026 and 2027 outlooks intact.
Second-quarter earnings
Sempra delivered a material adjusted earnings beat while reported revenue was broadly unchanged. Adjusted earnings rose to $762 million from $583 million, and adjusted EPS increased to $1.16 from $0.89 despite diluted shares increasing modestly to 656 million from 653 million. GAAP earnings benefited from the absence of the $25 million after-tax regulatory disallowance recorded in Q2 2025, while this quarter included a $71 million impact from Mexican foreign currency and inflation, an $82 million unrealized commodity-derivative gain, and a $20 million tax benefit related to assets held for sale.
- Revenue mix Total revenue was $2.997 billion versus $3.000 billion a year earlier; electric revenue rose to $1.158 billion from $1.031 billion, while natural-gas revenue declined to $1.364 billion from $1.470 billion.
- Segment earnings California contributed $297 million versus $259 million, Texas Utilities $346 million versus $208 million, and Infrastructure $230 million versus $72 million. Combined segment earnings increased to $873 million from $539 million.
- Sequential context Q2 GAAP earnings of $796 million and EPS of $1.21 were below Q1’s $1.04 billion and $1.58, reflecting normal quarter-to-quarter variation after a particularly strong first quarter.
Texas utility growth
Texas was the quarter’s most important operating growth engine and the central support for Sempra’s long-term utility thesis. Oncor’s new base rates became effective June 1, with an approved surcharge taking effect August 1 to recover the difference between the new rates and rates in place from January 1 to June 1. Management said the updated rates better align the utility’s cost structure with its operating environment and support continued grid investment.
- Demand growth Oncor deliveries increased to 44,595 million kWh from 42,226 million kWh, while customer meters rose to 4.141 million from 4.084 million.
- Transmission pipeline ERCOT-endorsed high-voltage transmission projects could require more than $7 billion of incremental investment, support approximately 16 GW of new demand, and enter service between 2026 and 2034, subject to regulatory approval.
- Large-load requests About 44 GW of requests in Oncor’s territory are expected to be eligible for the Batch Zero process, including 27 GW of base load and 17 GW of studied load. If fully realized, the requests would exceed 140% of Oncor’s current 31 GW peak load.
Capital investment program
Sempra continued to convert the demand outlook into a large regulated investment program. First-half capital deployed was $6.1 billion, comprising $4.7 billion of property, plant and equipment spending, $1.5 billion of contributions to unconsolidated entities, $3.2 billion of proportionate spending at those entities, and adjustments for noncontrolling interests. The spending is consistent with the company’s approximately $64.9 billion 2026–2030 capital plan.
- First-half spending Total capital expenditures for property, plant and equipment were $4.687 billion versus $4.640 billion in the first half of 2025; investment spending increased to $1.485 billion from $972 million.
- Plan allocation Sempra California represents $23.5 billion, or 36%, of the plan; Texas Utilities represents $38.2 billion, or 59%; and Infrastructure represents $3.2 billion, or 5%.
- Cash generation Operating cash flow was $3.117 billion in the first half versus $2.266 billion a year earlier, but investing cash use increased to $6.164 billion from $5.563 billion.
California regulation
California delivered modest earnings growth while Sempra advanced the regulatory filings and transmission projects that underpin future rate-base expansion. SDG&E and SoCalGas filed their 2028 General Rate Case applications, emphasizing wildfire-risk reduction, electric resilience, pipeline safety, affordability, and cost discipline. Separately, FERC approved SDG&E’s TO6 electric transmission settlement.
- Transmission framework The TO6 settlement provides an authorized base return on equity of approximately 10.28% and supports continued transmission investment.
- Approved projects California ISO’s 2025–2026 Transmission Plan included more than $160 million of reliability-driven projects for SDG&E.
- Customer programs SoCalGas estimated its energy-efficiency programs saved customers more than $100 million on utility bills last year, while SDG&E expanded battery-storage capacity during the quarter.
Portfolio transactions
Sempra’s portfolio simplification and capital-recycling program continued to progress. The planned sale of a 45% equity interest in Sempra Infrastructure Partners to KKR affiliates remains expected to close in the third quarter, subject to approvals and customary conditions. The Ecogas México sale advanced after Mexico’s antitrust authority approved it without conditions and is expected to close in August.
- Ecogas contribution Sempra’s GAAP guidance reconciliation includes an estimated after-tax and noncontrolling-interest-adjusted Ecogas gain of approximately $57 million to $77 million, equivalent to roughly $0.09 to $0.12 per share.
- Strategic rationale Management framed the transactions as a way to simplify the company, strengthen its financial position, and support additional utility growth.
- Infrastructure ownership The capital plan assumes Sempra owns 70% of Sempra Infrastructure Partners for the first three months of 2026 and 25% thereafter, reflecting the planned sale of the 45% interest.
Outlook and guidance
Sempra updated its full-year GAAP outlook to reflect results through June while leaving its underlying adjusted outlook unchanged. The company also retained its medium-term growth framework, indicating that the quarter’s beat did not alter its stated earnings trajectory.
- 2026 outlook GAAP EPS guidance is now $5.02–$5.55, while adjusted EPS guidance remains $4.80–$5.30.
- 2027 outlook Full-year 2027 EPS guidance remains $5.10–$5.70.
- Long-term growth Sempra continues to project 7%–9% long-term EPS growth.
