Sempra Energy NYSE: SRE affirmed its 2026 and 2027 earnings guidance as management highlighted higher earnings across its business segments, a planned asset-sale strategy and growing transmission investment opportunities in Texas during its second-quarter earnings call.
The company reported second-quarter 2026 GAAP earnings of $796 million, or $1.21 per diluted share, compared with $461 million, or $0.71 per share, in the prior-year quarter. On an adjusted basis, earnings rose to $762 million, or $1.16 per share, from $583 million, or $0.89 per share, a year earlier.
Chief Executive Officer Jeff Martin said the company’s operating businesses were executing well and that year-to-date adjusted earnings per share showed double-digit gains, with positive contributions from each of its three growth segments.
Guidance and Capital Plan
Chief Financial Officer Karen Sedgwick said Sempra reaffirmed its full-year 2026 adjusted EPS guidance range of $4.80 to $5.30 and its 2027 range of $5.10 to $5.70. The company also maintained its projected long-term EPS growth rate of 7% to 9%.
Sedgwick said the company remains focused on closing the pending sale of a 45% equity stake in SI Partners, strengthening its balance sheet after the transaction and advancing its $65 billion capital plan. The transaction is expected to close later in the third quarter.
Martin said the SI Partners sale supports Sempra’s strategy of simplifying its business model, recycling capital into regulated utilities and reducing the need for common equity under its current capital plan. The transaction is also expected to deconsolidate nearly $9 billion of debt from Sempra’s balance sheet.
Management said it expects Texas to become a larger share of the company’s operations, with a goal for the state to account for more than 60% of Sempra’s total rate base by 2030.
Texas Demand and Oncor Investment Opportunities
Sempra emphasized growth prospects at Oncor, its Texas electric transmission and distribution business, as ERCOT recorded an all-time peak load of 91 gigawatts in July. Oncor’s five-year base capital plan totals $47.5 billion, supplemented by $10 billion in identified incremental capital opportunities through 2030.
The incremental opportunities include $4 billion of North and Central Texas transmission upgrades endorsed by ERCOT, $3 billion of non-Permian Basin reliability projects endorsed in 2025 and approximately $3 billion associated with a system resiliency plan filing expected next year.
Martin said Oncor expects its next five-year capital-plan update on Sempra’s fourth-quarter call. He said management expects the plan to increase and that the business has flexibility to sequence projects within its capital program.
The Public Utility Commission of Texas recently approved ERCOT’s Batch Zero process for evaluating and sequencing large-load interconnection requests. Sempra said 44 GW of load requests could be eligible as base or studied load on Oncor’s transmission system, including 27 GW classified as base load and 17 GW requiring further system-wide reliability analysis.
That potential load would equal a 140% increase over Oncor’s current system peak load of 31 GW. About 8 GW of the 44 GW is already connected and expected to ramp toward full utilization, according to management. Oncor holds nearly $6 billion in collateral from large-load customers, including more than $2 billion related to the Batch Zero submissions.
Management said any transmission projects ultimately required through Batch Zero would be incremental to both Oncor’s base plan and its currently identified incremental opportunities. ERCOT’s timeline for identifying potential transmission projects is expected to extend beyond February 2027, meaning Oncor’s next capital-plan update is not expected to include Batch Zero-related investments.
Oncor CEO Allen Nye said the company’s overall interconnection queue reached 298 GW. He said the difference between a previously cited 127.5 GW advanced pipeline and the 44 GW in Batch Zero reflects stricter requirements under the finalized Batch Zero rules, including completed studies, financial security, site control and contracting-resource attestations.
Infrastructure Projects and Balance Sheet
Martin said Sempra Infrastructure is progressing on the planned sale of Ecogas in Mexico after receiving a regulatory approval, with the transaction expected to close later in August.
At ECA LNG Phase 1, Sempra Infrastructure CEO Justin Bird said the company identified damage to equipment connected to mixed refrigerant compressors following planned maintenance and inspections after its first cargo export in July. The company is working with its engineering, procurement and construction contractor and the original equipment vendor on the cause and remediation plan.
Bird said ECA LNG Phase 1 is expected to reach substantial completion in the fourth quarter of 2026, with sales under long-term sale-and-purchase agreements beginning shortly afterward. He said the company does not anticipate further delays and that ECA’s substantial completion is not a condition precedent for the SI Partners transaction.
Management also said Port Arthur LNG Phases 1 and 2 remain on time and on budget.
Sedgwick said the SI Partners transaction is central to Sempra’s credit-improvement efforts. She said Moody’s is monitoring the closing of the transaction, associated debt deconsolidation and progress on infrastructure-project milestones. Sedgwick said she expects rating-agency changes could come early next year, while noting the company is meeting regularly with rating agencies.
California Wildfire Discussions and Leadership Changes
Management said it remains constructive on California legislative discussions regarding wildfire liability and broader affordability and insurance issues, but declined to assess potential proposals before bill language is available.
Martin said the company’s California rate base is growing at roughly 5%, compared with utility-platform growth of approximately 11% at the enterprise level. He said Sempra believes its existing California capital plan is appropriately sized to support safety, reliability and affordability.
At the end of the call, Martin announced that Sedgwick will become the incoming chief executive officer of Southern California Gas Co. Justin Bird will become Sempra’s incoming chief financial officer. The leadership rotations are expected to take effect around the close of the SI Partners transaction later in the quarter.
About Sempra Energy (NYSE:SRE)
Sempra Energy is a San Diego–based energy infrastructure company that develops, owns and operates businesses delivering electricity and natural gas. Its operations include regulated utility services that provide electric and gas distribution to residential, commercial and industrial customers, as well as non‑regulated infrastructure businesses that develop and manage large-scale energy assets.
The company's product and service portfolio spans electricity and natural gas delivery, transmission and storage, liquefied natural gas (LNG) facilities, power generation and electric transmission projects.
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