Sempra Beats EPS, Gives Guidance - Analyst Blog
February 26 2013 - 8:11AM
Zacks
Sempra Energy’s (SRE) fourth-quarter 2012
earnings per share of $1.08 beat the Zacks Consensus Estimate of 97
cents by 11.3% but was lower than the year-ago figure by 10
cents.
The company reported GAAP earnings per share of $1.18, flat
year over year. The variance of 10 cents between GAAP and pro forma
earnings per share was due to a one-time receipt of 10 cents.
In 2012, Sempra Energy posted earnings of $4.35 per share, 5.8%
higher than the Zacks Consensus Estimate but lagged the 2011
results by a penny.
GAAP earnings for 2012 were $3.48 per share versus $5.51 per share
in 2011. The difference between operating and GAAP numbers was due
to non-cash charges of $239 million and after-tax cash receipts of
$25 million.
Total Revenue
Total revenue of Sempra Energy in the fourth quarter of 2012 was
$2,668 million, surpassing the year-ago number by $64 million and
the Zacks Consensus Estimate by $40 million.
Full-year 2012 revenues came in at $9.6 billion, lagging the
year-ago figure by 3.9% and the Zacks Consensus Estimate by 2%. The
year-over-year decline in revenue was primarily due to a 29.6%
decline in revenue from energy-related businesses.
Segment Update
San Diego Gas & Electric: Quarterly earnings
for San Diego Gas & Electric (SDG&E) were $110 million
compared with $158 million in the year-ago quarter, primarily due
to higher expenses and lower revenue for wildfire insurance
premiums compared with the previous year.
Southern California Gas Company (SoCalGas): The
segment generated earnings of $99 million, up $20 million year over
year.
Sempra South American Utilities: The segment
recorded earnings of $46 million, up from $39 million in the fourth
quarter of 2011.
Sempra Mexico: The segment recorded earnings of
$35 million compared with $80 million last year. A change in an
intercompany agreement resulted in lower earnings at Sempra Mexico
and higher earnings at Sempra Natural Gas.
Sempra Renewables: The segment recorded earnings
of $14 million, up from a loss of $2 million in the fourth quarter
of 2011. The uptrend was primarily due to an increase in solar and
wind assets.
Sempra Natural Gas: The segment recorded earnings
of $19 million versus a loss of $36 million in fourth-quarter 2011.
The turn to profit was driven by cash receipts due to sale of its
ownership interest in the Rockies Express Pipeline and the change
in the intercompany agreement with Sempra Mexico, partially offset
by lower earnings from LNG marketing operations.
Financial Update
As of Dec 31, 2012, cash and cash equivalents were $475 million
increasing from $252 million at the end of Dec 31, 2011.
Long-term debt increased to $11.6 billion from $10.1 billion at
2011 end.
In 2012 cash flow from operating activities was $2.02 billion, up
from $1.87 billion in 2011.
Guidance
Sempra Energy expects 2013 pro forma earnings in the range of $4.30
to $4.80 per share. This earnings guidance takes into consideration
the anticipated 2012 impact of the final decision in SDG&E's
and SoCalGas' General Rate Cases and 30 cents per share in
higher tax expense from repatriation of dividends from
international operations.
Other Company Releases
The Laclede Group Inc. (LG) reported earnings per
share of $1.25 in the first quarter of fiscal 2013, which surpassed
the Zacks Consensus Estimate by 14.68%.
Vectren Corporation (VVC) reported fourth quarter
2012 earnings of 52 cents per share, up 23.81% from the Zacks
Consensus Estimate.
Our View
Sempra Energy ends 2012 on a strong note and remains on track to
achieve compound annual earnings growth of 6% to 8%. The company
has doubled its renewable energy generation portfolio and its
success to win a bid to construct and own a $1 billion of natural
gas pipeline in Mexico will surely help its cause.
The board of directors approved a 4.8% increase in the quarterly
dividend rate to 63 cents. The increase reflects the underlying
strength of the business and management’s inclination to improve
shareholder value. Sempra Energy currently has a Zacks Rank #2
(Buy). Another Zacks Rank # 2 (Buy) stock Clean Energy
Fuels Corp. (CLNE) is yet to release its fourth quarter
2012 results.
Based in San Diego, California, Sempra Energy, along with its
subsidiaries, engages in the development of energy infrastructure,
operation of utilities, and provision of energy-related products
and services to its consumers. With a market cap of $18.30 billion,
the company has 17,483 employees.
CLEAN EGY FUELS (CLNE): Free Stock Analysis Report
LACLEDE GRP INC (LG): Free Stock Analysis Report
SEMPRA ENERGY (SRE): Free Stock Analysis Report
VECTREN CORP (VVC): Free Stock Analysis Report
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