Loading blog posts...
August 14, 2025 • 4 min read
Sempra Energy, a key player in North America's energy infrastructure landscape, recently released its financial results for the second quarter of 2025. This report offers a look into the performance of its sprawling operations, which include major California utilities like San Diego Gas & Electric (SDG&E) and Southern California Gas (SoCalGas), its stake in Texas utility Oncor, and its ambitious Sempra Infrastructure division focused on Liquefied Natural Gas (LNG) and other energy networks. Let's delve into the numbers from the company's latest 10-Q filing to see how its different parts are faring.
On the surface, Sempra's performance appears mixed. While total revenues held steady at $3.0 billion for the quarter, nearly identical to the same period in 2024, the bottom line tells a different story. Earnings attributable to common shares fell significantly to $461 million, or $0.71 per share, down from $713 million, or $1.12 per share, in Q2 2024.
To better understand where the money is coming from and where it's going, the following flow diagram visualizes the company's income statement for the six months ended June 30, 2025.
Please log in to view diagrams.
As the diagram and the headline numbers suggest, the decline in profitability wasn't uniform across the company. A closer look reveals a story of divergence among Sempra's primary business segments.
Sempra's business is organized into three main reportable segments, and each faced a different set of circumstances this quarter.
Sempra California: This segment, containing the well-known utilities SDG&E and SoCalGas, saw its earnings decline by 18% to $259 million. According to the filing, this was largely due to the disallowed regulatory recovery of certain COVID-19-related costs ($25 million impact) and higher net interest expense. This highlights the persistent regulatory and interest rate pressures on its core utility operations.
Sempra Texas Utilities: This segment, representing Sempra's investment in Oncor, was a source of stability. It posted a modest 3% earnings increase to $208 million. The growth was driven by rate updates reflecting new capital investments and a growing customer base, underscoring the steady, regulated nature of this business.
Sempra Infrastructure: Here lies the primary reason for the consolidated earnings drop. This segment's earnings plummeted to $72 million from $291 million in the prior-year quarter. The massive swing was predominantly caused by tax impacts related to its Mexican operations. The filing notes a $308 million negative swing from a tax benefit in 2024 to a tax expense in 2025, driven by "foreign currency and inflation effects on our monetary positions in Mexico." This volatility, combined with unrealized losses on certain derivative contracts, showcases the heightened risk profile of the international infrastructure business compared to the domestic utilities.
Despite the quarterly earnings pressure, Sempra is aggressively investing in its future. Capital expenditures for the first half of 2025 reached $5.6 billion, a substantial increase from $4.2 billion in the first half of 2024. The spending was split almost evenly between its California utilities and its Infrastructure segment, with significant funds also deployed in its Texas utility investment.
This heavy spending, particularly on large-scale projects like the Port Arthur (PA) LNG facility, signals Sempra's long-term bet on the growing global demand for LNG. To fund this expansion, Sempra is utilizing an "at-the-market" (ATM) equity program, which allows it to sell shares directly into the market over time, providing financial flexibility.
Sempra's second-quarter results paint a picture of a company in transition. While its core U.S. utility businesses provide a relatively stable foundation, its growth-oriented Infrastructure segment introduced significant volatility, largely from macroeconomic headwinds in Mexico. The sharp drop in quarterly earnings, driven almost entirely by this segment, serves as a reminder of the risks tied to large international energy projects.
Looking ahead, investors will be watching to see if the company's massive capital deployment, especially in the LNG sector, will pay off and how it navigates the complex market and currency risks that come with its global ambitions.
Last updated: August 14, 2025