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Sempra cuts FY'16 guidance after missing Q1 analyst estimates by wide margin


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Sempra cuts FY'16 guidance after missing Q1 analyst estimates by wide margin

on May 4lowered its 2016adjusted earnings guidance to a range of $4.60 per share to $5.00 per shareafter recording a year-over-year drop in first-quarter 2016 earnings.

Therevised guidance reflects the anticipated reduction in 2016 earnings ofapproximately $60 million, or 24 cents per share, related to the pendingsale of Sempra'sinterest in Rockies ExpressPipeline LLC, Sempra said in its earnings release.

Sempraalso set its 2020 EPS guidance range at $7.20 to $7.80 — reflecting an expectedcompound annual growth rate in adjusted earnings of 12% from 2016 through 2020.

Thecompany booked $370 million, or $1.47 per share, in first-quarter 2016 adjustedearnings, down from $428 million, or $1.71 per share, a year ago.

Theresult also misses the S&P Global Market Intelligence consensus normalizedEPS estimate of $1.66.

Thecompany said its books for the quarter were impacted by the delay of a final2016-2018 general rate case decision from the California Public UtilitiesCommission for SouthernCalifornia Gas Co. and SanDiego Gas & Electric Co.

First-quarterrevenues were down to $2.62 billion in 2016 from $2.68 billion in 2015.

On aGAAP basis, Sempra reported first-quarter 2016 earnings of $319 million, or$1.27 per share, compared with $437 million, or $1.74 per share, during thecomparable period in 2015.

GAAPresults in the most recent quarter included a $27 million after-tax lossrelated to the Rockies Express Pipeline transaction and $24 million of deferred tax expenserelated to the planned sale of the Termoeléctrica de Mexicali power plant.Results for the 2015 quarter included a $13 million after-tax benefit due tothe reduction in the loss related to the San Onofre nuclear generating stationclosure, offset by $4 million after-tax in LNG development expenses, thecompany noted.

SoCalGasrecorded a $19 million year-over-year drop in first-quarter earnings to $195million, due primarily to higher nonrefundable operating costs.

Meanwhile,the utility's updated estimate of costsrelated to the Aliso Canyon natural gas leak is $665 million. Concurrently, ithas recorded an insurance receivable of $660 million.

SDG&Eposted first-quarter 2016 adjusted earnings of $129 million, compared with $147million in the comparable quarter of 2015.

SempraNatural Gas recorded a loss of $36 million in the first quarter 2016, comparedwith earnings of $2 million a year ago. First-quarter 2016 earnings for SempraRenewables were flat year over year at $13 million.

SempraSouth American Utilities' first-quarter 2016 earnings were down to $38 millionfrom $41 million in the comparable period of 2015. Earnings for Sempra Mexiconarrowed $30 million year over year to $17 million during the most recentquarter.