Sempra Energy (SRE) posted strong fourth-quarter earnings of $1.16 per share, beating the Zacks Consensus Estimate by 3 cents. However, the company’s profit lagged behind the year-ago earnings per share (EPS) of $1.30. Fiscal 2009 results also witnessed an upward trend with EPS of $4.52, which
easily beat last year’s profit of $4.43.
Operational performance
Quarterly revenue increased 7.1% year over year to $2.5 billion. The upside came from both Sempra Utilities and Sempra Global segments. Sempra Utilities’ topline increased $56 million to $1.8 billion year over year. Sempra Global revenue increased $107 million to $618 million year over year. However, fiscal 2009 revenues fell to $8.1 billion from prior year’s $10.8 billion.
San Diego Gas & Electric – Earnings for San Diego Gas & Electric (SDG&E) rose to $344 million in 2009 from $339 million in 2008. SDG&E’s fourth-quarter 2009 earnings was $67 million, compared with $81 million in the prior-year’s fourth quarter, mainly due to lower regulatory incentive awards in 2009.
Southern California Gas Co. – Earnings for Southern California Gas Co. (SoCalGas) in 2009 increased to $273 million from $244 million in 2008. In the fourth quarter 2009, SoCalGas earned $75 million, compared with $54 million in the prior-year’s fourth quarter. The fourth-quarter improvement was primarily due to higher authorized operating margins and lower litigation expenses in 2009.
RBS Sempra Commodities – Sempra Energy generated earnings of $345 million in 2009 from its commodity operations, on par with 2008 earnings. Fourth quarter 2009 earnings was $71 million, compared with $164 million in the fourth quarter 2008, primarily due to reduced margins in natural gas and other product segments.
Sempra Generation – Sempra Generation’s 2009 earnings was $162 million, compared with $222 million in 2008. In the fourth quarter 2009, Sempra Generation’s earnings stood at $43 million, compared with $60 million in the fourth quarter 2008, primarily due to higher foreign-tax benefits in 2008.
Sempra Pipelines & Storage – Sempra Pipelines & Storage earned $101 million in 2009, compared with $106 million in 2008. Sempra Pipelines & Storage’s fourth-quarter earnings increased to $37 million in 2009 from $22 million in 2008, primarily due to improvement in the company’s Mexican operations and
South American investments. Sempra Pipelines & Storage’s 2009 results included a second-quarter charge of $64 million for the write-off of certain assets at Liberty Gas Storage in Louisiana .
Sempra LNG – In 2009, Sempra LNG posted earnings of $16 million, compared with losses of $46 million in 2008. In the fourth quarter 2009, Sempra LNG recorded earnings of $35 million, compared with losses of $13 million in the prior-year’s fourth quarter. The improvement in the fourth quarter 2009 was mainly due to the start-up of marketing and terminal operations. Both of Sempra LNG’s liquefied natural gas receipt terminals are now operational.
Financial Performance
Sempra Energy reported cash and cash equivalents of $110 million at the end of fiscal 2009 from $331 million at year-end fiscal 2008. The company reported $1.9 billion in cash from operating activities at the end of fiscal 2009, compared to $1.2 billion at the end of fiscal 2008. Long-term debt increased to $7.5 billion at the end of fiscal 2009 from $6.5 billion at the end of fiscal 2008.
Outlook
Sempra Energy expects its fiscal 2010 EPS to be in the range of $4.25 to $4.50. This is in-line with the Zacks Consensus Estimate of $4.43 for fiscal 2010.
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