Utility Sempra misses second-quarter profit, revenue estimates

By Vallari Srivastava

(Reuters) -Sempra missed Wall Street estimates for second-quarter profit and revenue on Tuesday, as weakness in its California segment weighed on the electric and gas utility, sending its shares down nearly 2%.

San Diego, California-based Sempra posted an adjusted profit of 89 cents per share for the second quarter, below estimates of 94 cents per share, according to LSEG data.

The company’s total quarterly revenue fell nearly 10% to $3.01 billion, also missing estimates of $3.4 billion.

The company, however, expects its Texas unit – Oncor – to benefit from a surge in demand for power, primarily driven by AI and data centers’ need for power. Texas’s ERCOT predicts a need for 152 gigawatts (GW) of power generation by 2030, a 78% increase from 2023.

“We expect approximately 40% of that future load to be served by Oncor,” an executive of the Sempra unit told analysts on a post-earning call.

Sempra CEO Jeffrey Martin said the company has received 341 new requests from large-load customers, representing about 80 GW of potential load. Of these requests, nearly 74% or 59 GW would come from potential data centers.

Sempra’s California unit, which represents 82% of its total revenue according to LSEG data, posted a profit of $316 million in the second quarter, which fell from $339 million last year.

Meanwhile, revenue at the California unit dropped nearly 3% to $2.63 billion, and electric sales fell to 661 million kilowatt hours (kWh) from 974 million kWh a year ago.