Sempra Reports Q3 Earnings, Raises 2026 Guidance to High End

Sempra (NYSE: SRE ) reported third-quarter financial results on Thursday. The transcript from the company's third-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Sempra reported strong financial performance with third quarter 2026 GAAP earnings of $877 million, or $1.34 per share, significantly up from $77 million, or $0.12 per share, in Q3 2025. Adjusted earnings increased by 26% to $917 million. The company is guiding to the high end of its 2026 adjusted EPS range of $4.80 to $5.30 and affirmed its 2027 EPS guidance range of $5.10 to $5.70. Sempra aims to maintain a long-term EPS growth rate of 7% to 9%.

Oncor's capital plan is expected to increase by 20% from its existing $47.5 billion, with significant projects including the 765 kV Permian Basin Reliability Plan. Oncor demonstrates strong demand growth, driven by economic expansion in Texas. Sempra California faces regulatory challenges, with a proposed CPUC decision potentially impacting 2027 earnings. However, this is seen as a one-year issue, with rates beyond 2027 addressed in the 2028 rate case.

The company is finalizing the sale of a 45% equity stake in SI Partners, aiming to simplify its business model and pay down debt, thereby lowering its risk profile and focusing on regulated utilities. Full Transcript OPERATOR Good day and welcome to Sempra's third quarter earnings call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Louise Bick.

Please go ahead. Louise Bick (Vice President — Investor Relations) Good morning and welcome to Sempra's third quarter 2026 earnings call. Live webcasts of this teleconference and slide presentation are available on our website under the Events and Presentations section.

We have several members of our management team with us today, including Jeff Martin, Chairman and Chief Executive Officer; Karen Sedgwick, Executive Vice President and Chief Financial Officer; Justin Bird, Executive Vice President of Sempra and Chief Executive Officer of Sempra Infrastructure; Caroline Winn, Executive Vice President of Sempra; Allen Nye, Chief Executive Officer of Oncor; Faisal Khan, Chief Commercial Officer of Sempra; Dyan Wold, Vice President, Controller and Chief Accounting Officer; and other members of our senior management team.

Before starting, I'd like to remind everyone that we'll be discussing forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in any forward-looking statement we make today. The factors that could cause our actual results to differ materially are discussed in the company's most recent 10-Q filed with the SEC. Earnings per common share amounts in this presentation are shown on a diluted basis, and we'll be discussing certain non-GAAP financial measures.

Please refer to the presentation slides that accompany this call for a reconciliation to GAAP measures. We also encourage you to review our 10-Q for the quarter ended September 30, 2026. I'd also like to mention that forward-looking statements contained in this presentation speak only as of today, November 5, 2026, and it's important to note that the company does not assume any obligation to update or revise any of these forward-looking statements in the future. We also encourage you to subscribe to the email alerts on our Corporate Updates webpage so you can remain informed of investor-related developments.

With that, please turn to slide three, and let me hand the call over to Jeff. Jeffrey W Martin (Chairman and Chief Executive Officer) Thank you all for joining us today. Our business continues to execute well as we remain focused on building America's leading utility growth business, and the strength of that execution is reflected in our year-to-date financial performance, including double-digit growth in adjusted EPS at Sempra, driven primarily by strong earnings growth at Sempra Texas.

Growth in our Texas segment is in response to robust customer demand and the following: higher levels of capital investment; completion of Oncor's recent rate case, which provided a timely update to the company's cost structure; and implementation of the Unified Tracker Mechanism. Based on the strength of our financial performance, we're pleased to guide to the high end of our adjusted EPS guidance range for 2026 and affirm our EPS guidance range for 2027. Karen will cover our financial results in greater detail later in the call.

Next, I'd like to walk through several developments in our business: first, an expected 20% increase over Oncor's 2026 through 2030 base capital plan; second, an update on business activities in California; and third, an update on our pending sale of a 45% equity stake in SI Partners. Let me start with a historical perspective. Going into 2018, Sempra had approximately $14 billion in utility rate base, all of which was located in California. Today, our business is larger, more diverse, and our earnings growth is more durable, with 2026 rate base now projected to exceed $65 billion later this year.

What's also different is the significant growth in our Texas footprint. Today, Oncor is the largest pure-play T&D business in the country and continues to experience remarkably strong demand growth, having recently reached a new peak on its system of 33 gigawatts, a 6% increase over the prior record set last year. This increase underscores the robust economic growth that's occurring in Texas as electric demand continues to exceed expectations. In addition, Oncor continues to build out and advance one of our industry's most robust supply chain management programs while also improving visibility to higher levels of future capital deployment.

Examples include new North and Central Texas transmission upgrades. The PUCT's recent approval of both segments of Import Path 1 is part of the larger 765 kV Permian Basin Reliability Plan, with two segments comprising Import Path 2 remaining under PUCT consideration. In combination, these are critical infrastructure projects that are needed to address reliability concerns and grid constraints in West Texas and the greater DFW metroplex. It's also important to note that Oncor remains committed to working constructively with the PUCT and all stakeholders to address landowner concerns.

This will continue to be a priority for Allen and his team as they look to help ensure Texas has the infrastructure required to maintain reliability and support future economic growth. That's why, when we release fourth quarter results next February, we plan to announce a 2027 through 2031 base capital plan that is expected to reflect, among other things, a significant increase of approximately 20% over Oncor's existing $47.5 billion capital plan. Along with the anticipated capital increase in Oncor's base plan, Allen's team is also tracking a significant opportunity set of incremental capital, which we look forward to providing additional details on in February.

Before wrapping up on Oncor, I'd be remiss if I didn't say how proud we are of Allen's leadership as well as Don Clevenger and the balance of that management team. Oncor is on a real growth footing, and it's doing a great job balancing a broad set of stakeholder interests. Now turning to Sempra California, we continue to invest in modernizing critical infrastructure to enhance reliability, safety, and customer service. Recent milestones include advancing compressor station modernization projects at both utilities and launching a new customer information system at SoCalGas, which is designed to strengthen customer service and digital capabilities.

Caroline Winn and her team are also excited to advance the Golden Pacific Powerlink, which is a FERC-regulated 500 kV transmission line that will extend over 100 miles across SDG&E's eastern system and form a part of Sempra California's roll-forward base capital plan that we'll discuss next year. On the regulatory front, the CPUC issued a proposed decision last week denying our petition for modification that was requested as an adjustment to the 2024 GRC capital attrition rates for our utilities.

Our petition for modification was viewed as a straightforward procedural filing to correct an error in the GRC decision and properly account for post-test-year capital investment. We expect to pursue all available regulatory avenues to get to the right decision here, but absent getting this corrected, we would expect Sempra California's segment earnings in 2027 to be toward the low end of its guidance range. It's important to note that the potential financial impact here is limited to 2027 only. That's because rates beyond 2027 will be addressed as part of our pending 2028 rate case, with new rates expected to take effect in January 2028.

Turning to the SI Partners transaction, we've made significant progress and expect to close within the next two weeks. I'd like to thank Justin for leading the effort, as well as our employees at Sempra and Sempra Infrastructure who have helped get this transaction to the finish line. It's really been a great team effort. Looking forward, our management team is excited.

Sempra's business model is getting simpler as we narrow our focus to regulated utilities. And importantly, with the completion of the SI Partners transaction, we expect to pay down debt, strengthen the balance sheet, and lower our risk profile to support future growth and continue making investments to grow our rate base and ultimately drive the mix of earnings increasingly toward Texas, where we aim to give our owners increased exposure to significant value creation through the end of the decade and beyond. In conclusion, I'm really pleased with the contributions from our leadership team and all of our employees.

Our financial performance is certainly benefiting from a back-to-basics utility strategy and broad-based growth with improving earnings and cash flows. With that, I'll turn it over to Karen, who will cover our financial results. Please turn to the next slide. Justin C.

Bird (Chief Financial Officer) Thank you, Jeff. Earlier today Sempra reported third quarter 2026 GAAP earnings of $877 million, or $1.34 per share. This compares to third quarter 2025 GAAP earnings of $77 million, or $0.12 per share. On an adjusted basis, third quarter earnings were $917 million, or $1.40 per share.

This is an increase of 26% compared to our third quarter 2025 earnings of $728 million, or $1.11 per share. As Jeff noted, we're very pleased with our year-to-date performance, which gives us the confidence to guide toward the high end of our 2026 adjusted EPS guidance range. Please turn to the next slide. Variances in the third quarter 2026 adjusted earnings compared to the same period last year can be summarized as follows.

At Sempra Texas, we're seeing remarkable growth with $154 million of higher equity earnings from new base rates, the UTM SRP and higher customer consumption primarily attributable to weather, partially offset by higher interest expense, depreciation, and O&M. Turning to Sempra California, we had $46 million of increased earnings primarily from higher CPUC-based operating margin, net of operating expenses, and higher electric transmission margin. Sempra California also had $44 million of lower earnings from lower income tax benefits, higher net interest expense, lower net regulatory interest income, and other.

At Sempra Infrastructure, earnings increased by $53 million primarily from lower depreciation due to assets held for sale, lower interest expense, lower O&M, and other, partially offset by lower asset optimization. And at Sempra parent, $20 million of higher losses from lower income tax benefits and net investment losses, partially offset by lower preferred dividends. Please turn to the next slide. As this slide demonstrates, 2026 has been a year of strong financial and operational execution.

As a result, we're guiding to the high end of our full-year 2026 adjusted EPS guidance range of $4.80 to $5.30 and affirming our 2027 EPS guidance range of $5.10 to $5.70, while recognizing that pending regulatory outcomes could cause results to be in the lower half of this range. We're also affirming our projected long-term EPS growth rate of 7% to 9%. Given the growing opportunity set in front of our company, we're working to finalize our financial plan later this year, which will look to balance our updated operating cash flows with the expected increases in our capital expenditures through 2031.

As part of that process, we'll continue to compete capital internally across the portfolio and execute our overall financing strategy with a focus on prioritizing the most efficient funding sources, which could include, among other options, incremental capital, recycling proceeds received from the SI Partners transaction, the use of our established ATM program, and hybrid and debt financings. With these options, we have a lot of flexibility to fund the expected growth ahead in an efficient way while maintaining a strong balance sheet.

In closing, we continue to believe there is significant value in higher growth T&D companies, particularly those positioned to benefit from sustained investment in critical energy infrastructure. Sempra's utility businesses effectively operate as energy networks, with commodity costs passed through and significant credit risk from individual customers largely avoided. This creates an important distinction relative to the risks you're seeing play out in other parts of the utility industry while reinforcing the lower-risk and sustainable nature of our business model.

At Sempra, our growth is broad-based, supported by long-term infrastructure needs, and extends across all customer classes in two of America's largest economic markets. Also backed by a diverse portfolio and disciplined investment approach, we expect Sempra's lower-risk growth and income story will translate into significant value for our owners as we offer a compelling mix of current yield, durable earnings growth, and long-term capital appreciation. I'm going to pause there, and we'll open it up to the call for your questions. OPERATOR Thank you.

This concludes the prepared remarks. We will now open the line to take your questions. Please limit your questions to one question and one follow-up. If you would like to ask a question, please signal by pressing star 1-1 on your telephone keypad.

Please make sure your mute function is turned off. We will pause for just a moment to allow everyone to signal for questions, and our first question will come from Char Pareza from Wells Fargo. Your line is open. Jeffrey W Martin (Chairman and Chief Executive Officer) Hey, Char, how are you doing?

Char Pareza (Analyst at Wells Fargo) Not too bad, not too bad. Hope all is well. Just maybe starting off on the political changes in Texas. I mean, the data center rhetoric is becoming a little bit more uncertain, I guess.

What do you see as the risk to Oncor's transmission capex, especially as we're thinking about the state's kind of blue wave heading into a legislative window in '27? Think 765 will be the focus, or could we see legislative action on all wires fronts? The state's, I mean, such a big driver of growth for you. So just thinking about the risks there.

Thanks. Jeffrey W Martin (Chairman and Chief Executive Officer) Yeah, thank you for that question, Char. I think there's probably two key parts to it. One is the measure of our confidence in Oncor's capital plan going forward, and I think I will take that question last.

And I think the other question you had embedded was really how we're thinking about the election. So, as Alan and I will tackle that first and I'll close out. Char, if I could, on my confidence level about the capital plan going forward, I would just start by saying we look forward to working with the new administration in Texas. Across our long history at Sempra, Char, you'll recall that we've always really focused on running our business well for customers.

If you spend your time focused on new and better ways to serve customers, we've found that that has always been very important advice and part of our culture for a long period of time. And I would say Oncor has traditionally taken the same approach. Char, Alan, perhaps you can provide some color on how you're thinking about the political backdrop and I'll come back to the capital plan. Alan Nye Yeah, sure.

Thanks, Jeff. And morning, Char. Look, as Jeff said, we're looking forward to working with the new administration. While it's too soon to tell exactly what it all means, but generally, the way I think about it, we provide an essential service that's needed regardless of the party in power.

And things like reliable, affordable, safe electric service, those are not partisan issues. And things like economic development and job creation are not partisan issues. And the things that attract people to Texas and businesses to Texas have not changed and go beyond any individual person or party. And so we believe, and we continue to believe, that both parties want a strong and growing Texas.

And we expect that to continue. And we are going to continue to provide the necessary infrastructure to support our customers in our state. Jeff said it, but I've been around this company a long time. Throughout the history of this company, we've always worked very well with both parties, and we're going to continue to do so.

And so again, we look forward to working with the new state leadership in keeping Texas strong and growing. Jeffrey W Martin (Chairman and Chief Executive Officer) Thanks, Alan. I'll just follow up real quickly, Char, on the other part of your question regarding the capital plan.