Sempra Energy's (SRE) first-quarter earnings declined 7% as profit from its natural gas business weakened considerably in the absence of a key contract with the state of California.
The power and energy company owns electric and natural gas utilities in California; utilities in South America; and natural gas pipelines and storage facilities and liquefied natural gas terminals in the U.S. and Mexico.
With prices for natural gas at historic lows, Sempra is in the process of obtaining government approvals to build a facility in Louisiana that would liquefy gas produced in the U.S. and load it onto tankers to ship abroad.
It has obtained preliminary government approval to export natural gas from the terminal to countries that have free-trade agreements with the U.S. Sempra needs approval from the Federal Energy Regulatory Commission to proceed with exports.
For the first quarter, Sempra reported a profit of $238 million, compared with a year-earlier profit of $256 million. Per-share earnings, which reflect the payment of preferred dividends of subsidiaries, fell to 97 cents a share from $1.05 a year ago.
Revenue decreased 2.1% to $2.38 billion. Analysts were looking for earnings of 98 cents a share on $2.33 billion in revenue, according to a poll conducted by Thomson Reuters.
At the company's California utilities, San Diego Gas & Electric utility posted an 18% increase in profit, due primarily to earnings from construction work in progress. Southern California Gas Co. earnings were down about 3% at $66 million.
The company's natural-gas business, meanwhile, saw its earnings slump 98% to $1 million, a decline the company said mostly reflected the expiration of a 10-year power-supply contract with the California Department of Water Resources last year.
Shares were recently up 1% at $64.64 in trade shortly after the New York market open.
--By Mia Lamar, Dow Jones Newswires; 212-416-3207; firstname.lastname@example.org