Sempra (SRE 1.93%), a utility and energy infrastructure company serving millions across California, Texas, and Mexico, released its second quarter 2025 earnings on August 7, 2025. The most important news: its non-GAAP earnings per share (EPS) came in at $0.89, beating Wall Street expectations of $0.85 (non-GAAP). Revenue (GAAP) was $3.0 billion, missing the $3.10 billion analyst revenue consensus and showing a modest decline compared to the same period last year. Overall, the quarter showed solid profitability driven by regulated utility operations, but infrastructure segment earnings saw notable softness.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.89 | $0.85 | $0.89 | 0.0 % |
| Revenue (GAAP) | $3.0 billion | $3.10 billion | $3.01 billion | (0.3 %) |
| Net Income (GAAP) | $461 million | $713 million | (35.3 %) | |
| Adjusted Earnings (Non-GAAP) | $583 million | $567 million | 2.8 % | |
| Capital Expenditures – Consolidated | $2.30 billion | N/A | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company Overview and Business Focus
Sempra’s main business is operating regulated utilities and building energy infrastructure. The utilities segment provides electricity and natural gas through its California arms (SDG&E and SoCalGas) and its Texas holdings (Oncor and Sharyland Utilities). These businesses supply power and gas to millions of customers, anchored by government-regulated rates that enable predictable earnings and cash flows.
Beyond utilities, Sempra invests heavily in energy infrastructure, with an emphasis on liquefied natural gas (LNG) export facilities and energy networks in the United States and Mexico. Segment performance depends on building, operating, and exporting from these facilities. Key success factors include navigating regulatory approval, controlling capital spending, and adapting to energy transition trends such as renewables and clean fuels. Recent years have seen Sempra focus more on regulated utility growth, aiming for greater stability, and moving to reduce exposure from non-regulated ventures.
Key Developments in the Quarter
In its regulated utility businesses, Sempra continued substantial capital investments. The segment saw earnings of $259 million (GAAP), though that dropped from $316 million in the prior year quarter. Notably, SDG&E received approximately $600 million in new transmission project awards as part of the California Independent System Operator's 2024–2025 Transmission Plan, reflecting progress in grid modernization and infrastructure upgrades in California. Electric and gas customer growth held steady, but total gas deliveries fell 5.6% year-over-year for the first six months of 2025, showing some softness in demand.
Sempra Texas Utilities, which covers the Oncor and Sharyland networks, posted $208 million in segment earnings (GAAP), slightly higher than the prior year. Investments soared to $485 million from $192 million the previous year as Oncor responded to surging transmission demand and customer growth. Oncor added about 20,000 new premises, processed over 1,120 active interconnection requests (up nearly 40% compared to Q2 2024), and completed or upgraded nearly 600 miles of transmission and distribution lines. A major legislative change in Texas established the Unified Tracker Mechanism, which aims to speed up regulatory cost recovery and improve returns on new capital investment. The Unified Tracker Mechanism was introduced through House Bill 5247 during the state's regular biennial legislative session. — a significant operational improvement for the business.
In the infrastructure investments segment, Sempra Infrastructure earnings (GAAP) dropped sharply to $72 million, down 75% year over year from $291 million in Q2 2024. Capital expenditures for infrastructure projects rose to $1.08 billion, a 30.7% increase compared to Q2 2024 (GAAP). Key project milestones included the execution of a 20-year LNG supply deal with JERA Co. Inc. in July 2025 and Phase 2 expansion progress at the Port Arthur LNG facility, including receipt of non-FTA export authorization and execution of a 20-year sale and purchase agreement with JERA Co. Inc. for 1.5 Mtpa of LNG offtake. Management highlighted that five large construction projects remain underway. Asset sales and a partial equity sale to KKR are targeted for closure in Q2 or Q3 2026.
At the corporate level, Sempra is executing a restructuring strategy focused on selling non-core assets and rotating capital into utilities. Planned divestitures, including an equity interest in Sempra Infrastructure and the sale of Ecogas México, are expected to close in Q2 or Q3 2026. Management said these would support higher regulated earnings as a percentage of company results on an annualized basis in future years.
The company’s spending remains elevated. Operating and maintenance expenses (GAAP) fell modestly to $1.24 billion, while Depreciation and amortization costs (GAAP) rose 8% to $653 million compared to Q2 2024. Interest expense (GAAP) jumped 15.4% from Q2 2024, reflecting higher debt and ongoing capital expenditures. Net cash provided by operations (GAAP) totaled $2.27 billion for the first half of 2025, down from $2.52 billion for the first half of 2024 as investment spending outpaced operating cash flow growth.
Sempra did not report any material changes to its dividend policy in the quarter. The company typically declares and pays a quarterly dividend but no change in amount was noted this quarter.
Financial Outlook and What Lies Ahead
Management reaffirmed its full-year fiscal 2025 adjusted EPS guidance at $4.30–$4.70 and raised its GAAP EPS guidance range to $4.05–$4.45 for full-year 2025, factoring in results through the first half. The 2026 adjusted EPS target remains $4.80–$5.30. The company stated its goal to deliver annual earnings growth at or above the high end of its 7% to 9% long-term target for 2025 through 2029. Company leaders say that robust regulated utility investment should make up “90% or greater” of Sempra’s earnings mix at some point in the company’s five-year plan as asset sales are completed and balance sheet leverage improves.
For upcoming quarters, investors should watch for further developments on key regulatory filings in California and Texas that could impact Sempra’s allowed returns, as well as progress on asset sales slated for 2026. Management flagged inflation, interest rates, and foreign currency movements as continuing risks to monitor. Persistent underperformance in the infrastructure segment or any delays to the company’s asset sales could put pressure on future results and capital plans.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
