As per a recent news release, Sempra Energy (SRE) sold senior unsecured notes in two parts. Through the sale the energy utility has raised $800 million in two tranches. The first tranche of $500 million notes has a coupon rate of 2.00% and is due to mature on March 15, 2014 while the second tranche of 300 million notes, with a 3-month London Interbank Offered Rate plus 76 basis points, is due to mature on March 15, 2014.
Sempra Energy will use the proceeds from the sale for general corporate purposes, including repayment of commercial paper. Citigroup, Inc. (C) JP Morgan Chase & Co. (JPM) and Wells Fargo & Company (WFC) is the joint book running managers for the deal. Sempra Energy’s $800 million senior unsecured note issuance has been assigned ‘BBB+’ rating from Standard & Poor’s Ratings Services.
In February this year, Sempra Energy announced its fourth-quarter earnings of $1.18 per share surpassing the Zacks Consensus Estimate of 94 cents and the year-ago quarterly earnings of 88 cents per share. On December 31, 2010, cash and cash equivalents were $912 million versus $110 million at the end of the comparable period a year ago. Long-term debt increased to approximately $9 billion at the end of the reported period from $7.5 billion at the end of fiscal 2009.
In February this year, Sempra Energy announced its fourth-quarter earnings of $1.18 per share surpassing the Zacks Consensus Estimate of 94 cents and the year-ago quarterly earnings of 88 cents per share. On December 31, 2010, cash and cash equivalents were $912 million versus $110 million at the end of the comparable period a year ago. Long-term debt increased to approximately $9 billion at the end of the reported period from $7.5 billion at the end of fiscal 2009.
Going forward, the Zacks Consensus Estimates for first quarter 2011 and fiscal year 2011 are currently at 1.04 per share and $4.19 per share, respectively.
Sempra Energy’s diversified basket of businesses insulates its operations to a significant degree from regulatory rate risks, compared to its integrated utility peers. We believe that the company presents a lower risk profile relative to its peers. This bullish outlook is supported by stable utility earnings, steady progress at its LNG terminals, ongoing installations of smart meter, and renewable power projects in the Pacific Southwest. The company presently retains a short-term Zacks #2 Rank (Buy). We have a long-term Neutral recommendation on the stock.
Sempra Energy is a southern California-based energy services holding company; involved in the sale, distribution, storage, and transportation of electricity and natural gas.
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