SRE · Sempra

Sempra’s Q1 2026 results reflect continued execution on its regulated utility strategy, with GAAP net income rising 14.8% year-over-year to $1.037 billion and GAAP EPS increasing to $1.58 from $1.39, supported by higher electric revenue (+15.6%) and equity earnings (+12.9%), partially offset by a 14.2% decline in natural gas revenue. Adjusted earnings of $991 million ($1.51 EPS) exclude $46 million in after-tax items—including foreign currency impacts, derivative losses, and tax items related to assets held for sale—indicating underlying operational resilience. Management highlighted Oncor’s recently approved Texas base rate order as a key near-term catalyst: effective retroactively to January 1, 2026, it establishes a $6.97 billion annual revenue requirement, 9.75% ROE, and revised capital structure, with accounting impacts beginning in Q2. In California, SDG&E’s FERC TO6 filing seeks a 10.28% ROE, pending decision in H2 2026. Capital discipline remains central—$3 billion deployed in Q1 supports Sempra’s $65 billion 2026–2030 plan, 95% focused on utility infrastructure in Texas and California. Guidance updates are modest: only the GAAP EPS range was revised to $4.87–$5.37, while adjusted EPS guidance ($4.80–$5.30) and the 7%–9% long-term EPS growth target were reaffirmed, signaling confidence in regulatory execution and capital recycling progress, including expected closings for SI Partners and Ecogas transactions in Q2–Q3 2026.