) narrowed its earnings expectation for this year sending its
share price down by 2.7% to $79.47 on May 23, 2013, at the New
York Stock Exchange.
Sempra lowered the high end of its 2013 guidance range and now
expects earnings of $4.30 to $4.60 per share. Earlier, it had
projected earnings in the range of 4.30 to $4.80 per share.
For 2014, the company has also set its expectation between $4.25
and $4.55 per share. For 2017, Sempra anticipates earnings of
$5.10 to $5.60 per share. However, its earnings guidance through
2017 does not involve any major contribution from its Cameron
liquefied natural gas export project in Louisiana. The project is
not expected to be operational fully until the end of 2018.
Sempra Energy is a southern California-based energy services
holding company involved in the sale, distribution, storage, and
transportation of electricity and natural gas.
Sempra's first quarter 2013 top as well as bottom line results
missed the Zacks Consensus Estimate, in the wake of weak earnings
across its business segments except the Sempra Natural Gas unit.
Again, Sempra's businesses are capital intensive and rely
significantly on long-term debt for its capital expenditures.
Additionally, the company operates in the state of California
which maintains an aggressive 20%-plus renewable portfolio
standard requirement. The targets are expected to further ramp up
to 33% by 2020. This would entail significant investment towards
renewable energy projects necessitating more funds.
However, the positives in Sempra's story include the Sunrise
Powerlink electric transmission line, ongoing installations of
smart meter, substation expansions, higher utility operating
margins from regulatory rate hikes, contracts to construct and
own approximately $1 billion of natural gas pipelines,
development of renewable power projects in the Pacific Southwest
and completion of major regulatory filings for the Cameron LNG
These developments would keep the momentum going for its 6%-8%
earnings growth target. Sempra also plans to spend approximately
$2.9 billion annually between the 2013 and 2017 time frame.
Presently, Sempra holds a Zacks Rank #2 (Buy). Other stocks worth
considering are Zacks Ranked #2 (Buy)
Atmos Energy Corp.
Chesapeake Utilities Corporation
) and a Zacks Ranked #1 (Strong Buy)
National Fuel Gas Company
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SEMPRA ENERGY (SRE): Free Stock Analysis
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