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DATE
Thursday, Nov. 5, 2026
CALL PARTICIPANTS
- Chairman and Chief Executive Officer – Jeffrey Walker Martin
- Executive Vice President and Chief Financial Officer – Karen L. Sedgwick
- Executive Vice President of Sempra and Chief Executive Officer of Sempra Infrastructure – Justin Bird
- Executive Vice President of Sempra – Caroline A. Winn
- Chief Executive Officer of Oncor – Alan Nye
- Chief Commercial Officer – Faisal Khan
- Vice President, Controller, and Chief Accounting Officer – Dyan Z. Wold
- Chief Financial Officer of Oncor – Don Clevenger
TAKEAWAYS
- Adjusted EPS — $1.40, representing 26% year-over-year growth driven by strong results at Sempra Texas and Sempra Infrastructure.
- GAAP EPS — $1.34, compared to $0.12 in the prior-year period reflecting the impact of gains on sales and lower transaction-related costs.
- 2026 Adjusted EPS Guidance — $4.80 to $5.30, with management guiding toward the high end of this range based on year-to-date performance.
- 2027 EPS Guidance — $5.10 to $5.70, affirmed by management reflecting confidence in the underlying growth of the utility portfolio despite potential California regulatory headwinds.
- Oncor Base Capital Plan — 20% expected increase, raising the 2027 to 2031 plan relative to the existing $47.5 billion capital plan to address grid reliability needs.
- Rate Base — $65 billion, projected to exceed this level later in 2026 compared to $14 billion in 2018 due to significant investment in Texas and California utilities.
- Sempra Texas Adjusted Earnings — $154 million increase, driven by higher equity earnings from new base rates and weather-related customer consumption.
- Sempra California Adjusted Earnings — $2 million increase, reflecting higher operating and transmission margins offset by lower income tax benefits and higher interest expense.
- Sempra Infrastructure Adjusted Earnings — $53 million increase, resulting from lower depreciation on assets held for sale and reduced interest expense.
- Non-Data Center Large Load Requests — 19 gigawatts, representing a 23% year-over-year increase driven by demand from manufacturing and oil and gas fields.
- Oncor System Peak Demand — 33.3 gigawatts, a 6% increase over the record set last year reflecting strong economic growth in the service territory.
- Permian Basin Reliability Plan — Two segments of Import Path 1 approved, supporting infrastructure development to address critical reliability needs in West Texas.
- Batch Zero Large Load Classification — 24 gigawatts classified as base load, reflecting significant customer commitment through financial security and site control.
- SDG&E Net System Peak Energy Demand — 5.2 gigawatts, reached during an extreme weather period that tested system reliability in the third quarter.
- SI Partners Equity Sale — 45% stake, with management expecting the transaction to close within the next two weeks to help simplify the company business model.
- Ecogas Sale Gain — $97 million, following the completion of the divestiture in August 2026 as part of the company’s capital recycling program.
- Year-to-Date Capital Investment — $10 billion, supporting the modernization of regulated utility infrastructure across Texas and California.
- Projected Rate Base CAGR — 11%, supporting the company’s affirmed long-term earnings targets.
- Long-Term EPS Growth Rate — 7% to 9%, affirmed by management based on broad-based utility growth and infrastructure needs.
- California Revenue Requirement Correction — $188 million, requested via a petition for modification to rectify an error in the capital attrition mechanism.
- Manufacturing Sector Demand — 6 gigawatts, comprising a portion of the 19 gigawatts in non-data center large load requests in Texas.
- Oil and Gas Field Expansion Demand — 5 gigawatts, contributing to the total 19 gigawatts of non-data center requests in the Permian Basin.
- Golden State Power Link — 500 kV line, extending over 100 miles across the San Diego Gas & Electric system to enhance grid reliability.
- Mexico Asset Sales — $535 million, reflecting the divestiture of Ecogas Mexico and other transaction-related activity.
- Equity Earnings from Sempra Texas — $462 million, increasing from $307 million in the prior-year period due to higher equity earnings from Oncor.
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RISKS
- Sedgwick stated, “While recognizing that pending regulatory outcomes could cause results to be in the lower half of this range,” referring to the affirmed 2027 EPS guidance range.
- Martin stated, “Sempra California segment earnings in 2027 to be toward the low end of its guidance range,” if the company is unable to correct a regulatory error regarding capital attrition through its pending petition for modification.
SUMMARY
Sempra (SRE -3.70%) reported that its year-to-date performance was driven by significant expansion in its Texas operations and disciplined capital execution across its utility platforms. Management stated that the company is simplifying its business model to focus primarily on regulated utilities while utilizing capital recycling to strengthen the balance sheet. The company is advancing infrastructure projects in both California and Texas to meet rising demand from manufacturing, oil and gas, and data center customers. Management indicated that the projected rate base growth supports long-term earnings targets despite temporary regulatory challenges in California.
- Martin noted that batch zero projects represent potential upside beyond the figures presented to investors because they are excluded from both the base and incremental plans through 2031.
- Alan Nye stated that reliability, affordability, and safe electric service are universal priorities that remain consistent regardless of political shifts.
- Management expects to utilize proceeds from the SI Partners equity sale to pay down debt and strengthen the balance sheet following the expected closing in November 2026.
- Martin noted that Oncor has transitioned to a growth footing by balancing stakeholder interests and advancing supply chain management programs to improve visibility for capital deployment.
- The company is pursuing regulatory appeals to correct a capital attrition mechanism error in California that could impact 2027 segment earnings if not rectified.
- The Golden State Power Link transmission project will extend 500 kV capacity over 100 miles to enhance grid reliability in Southern California.
- Martin stated that Faisal Khan will transition to the role of Chief Commercial Officer to oversee expanded functions including treasury and corporate development.
INDUSTRY GLOSSARY
- Oncor: An electric transmission and distribution company in Texas in which Sempra holds an 80.25% interest.
- ERCOT: The Electric Reliability Council of Texas, which operates the electrical grid for the ma
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
