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Investing.com -- Sempra Energy (NYSE: NYSE:SRE) shares tumbled 12% as the company reported fourth-quarter earnings and revenue that fell short of analysts’ expectations. The energy services holding company posted earnings per share (EPS) of $1.50 for the quarter, which was $0.08 below the analyst estimate of $1.58. Revenue for the quarter came in at $3.76 billion, significantly lower than the consensus estimate of $4.9 billion.
The San Diego-based company also provided guidance for the fiscal years 2025 and 2026, with EPS forecasts of $4.30-$4.70 and $4.80-$5.30 respectively, both below the consensus estimates of $5.15 for 2025 and $5.56 for 2026. This revised guidance reflects the company’s expectations in the face of regulatory matters and a higher-cost environment.
Sempra Energy’s full-year 2024 earnings reported on February 25, 2025, showed a decline compared to the previous year, with GAAP earnings of $2.82 billion or $4.42 per diluted share, down from $3.03 billion or $4.79 per diluted share in 2023. The adjusted earnings for 2024 were slightly higher at $2.97 billion or $4.65 per diluted share, compared to $2.92 billion or $4.61 per diluted share in 2023.
The company announced a substantial increase in its five-year capital plan, now targeting $56 billion, with a focus on investments in Texas and California. Over half of the planned capital expenditures are earmarked for Texas, aligning with Sempra’s strategic focus on expanding and modernizing the energy grid to support growth in the region.
Despite these investments, the market reacted negatively to the lower-than-expected earnings and guidance. Evercore ISI analyst Durgesh Chopra commented on the implications for Sempra’s stock, stating, "We believe Sempra’s 4Q24 earnings release has negative implications for SRE shares. Sempra reported 4Q24 adjusted EPS below estimates, lowered 2025 EPS guidance which was also below forecasts, rolled forward its long-term EPS growth which at the midpoint with linear growth implies lower 2027 EPS than consensus and our estimate."
Investors are weighing the company’s financial performance against its ambitious capital expenditure plans and revised earnings projections, resulting in the stock’s decline during the trading session.
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