Sempra Energy (NYSE:SRE) earnings numbers didn't look that great on the surface when it reported last week. But the big news came when the company announced that it was tabling its plans to spin off several of its assets into a master limited partnership. Those two things combined would make any quarter look bad, but in this case looks can be deceiving. Let's take a quick look at why Sempra's earnings for the quarter aren't completely representative of how the company is doing and why investors shouldn't sweat the sudden change in management plans.

By the numbers
Sempra ended the third quarter with earnings of $248 million, or $0.99 per fully diluted per share. This is pretty much in line with what analysts expected, but was a bit below the $1.41 in earnings from the same quarter last year. The chart below shows the company's earnings broken out by business segment.

 

Source: Sempra Energy earnings release, author's chart

One thing that needs to be kept in mind when looking at these results, though, is that Sempra's earnings are highly seasonal, especially in its Southern California Gas Company. According to management, seasonality had a $113 million earnings impact on SoCalGas. Also, its U.S. Gas & Power was lower year over year mostly because of a $25 million tax benefit it received in the third quarter of 2014.

So even though this quarter does look decidedly weaker than previous ones, don't get too worked up over it. Sempra's nine month earnings are at $3.91 per share, well above the $3.45 per share over the first nine months in 2014. In fact, Management actually raised its adjusted earnings guidance for the entire year thanks in part to the results that were posted in this quarter.

The big decision: No MLP for now
Sempra Energy basically has two separate five-year growth plans in place. The first is the company's Base Plan that mostly revolves around some improvements to existing facilities and the addition of the Cameron LNG facility. Then there is Sempra's growth plans that are beyond this base plan. This is where things really get interesting, because there are several billion in major capital projects available to it. Aside from the current plan to build the first three trains at the Cameron LNG facility, there are also plans in the works to increase Cameron to a five train facility, convert an existing regasification terminal in Port Arthur to an export facility, and even convert its Energia Costa Azul LNG regasification terminal in Mexico into an export terminal.

Funding these projects won't exactly be easy, though. During the company's investor day presentation back in February, Sempra's management explained that it was going to spin off several of its renewable and natural gas infrastructure assets into a master limited partnership and use the proceeds from the partnership to fund these projects.

A lot has happened since that time, most notably a rapid decline in investor appetites for master limited partnerships. So this quarter, the company announced it would be tabling the decision to form a master limited partnership for later when the market for such a spin off would be more attractive. CEO Debra Reed noted that the company's base rate growth plan was not contingent on the formation of a master limited partnership, and that the company remains on track to meet its base rate plan.

It's hard to say when the market for MLP equity will rebound, so it's too soon to tell when we can expect Sempra to go forward with the plans for Sempra Partners. At the same time, it's reassuring to see that the company can keep its development projects on track without the need for a major injection of capital from an equity spin off.

What a Fool Believes
All and all, Sempra Energy appears to be on track to meet its base growth plan out to 2019, and it has been rather successful at winning bids in several auctions of Mexican infrastrucuture projects that add to this base plan. As long as the company can secure and maintain its existing track without the need for capital from spinning off Sempra Partners, then the company should be in fine shape to benefit handsomely from the opportunities that lie ahead of it.

Tyler Crowe has no position in any stocks mentioned. You can follow him at Fool.com or on Twitter @TylerCroweFool.

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