Sempra Exceeds Profit Expectations as LNG Expansion Propels Growth

(Reuters) — Sempra has outperformed market projections for second-quarter profit, riding on the tailwinds of reduced costs and robust sales across its California units.

For the three months concluding on June 30, the company reported an adjusted net income per share of $1.88, surpassing analysts' consensus estimate of $1.75, as per data from Refinitiv.

The fortuitous decline in natural gas prices, plunging to a 30-month low in April, translated into substantial cost savings for utility providers in their customer procurement efforts. Complemented by a decrease in electric fuel and purchased power expenses, this cost-efficient strategy significantly buoyed Sempra's profitability.

Fueling its growth trajectory, Sempra has strategically positioned LNG as a burgeoning sector within its portfolio. The company is making noteworthy strides in expanding its LNG infrastructure, with key projects in the pipeline.

Among these ventures is the Costa Azul LNG export plant in Mexico, which is on track to contribute to Sempra's LNG growth strategy. Additionally, a Texas-based LNG facility is under development, hinting at the company's resolute focus on LNG as a transformative growth avenue.

Anticipating the first shipments from Mexico as early as 2025, Sempra is steadily shaping the future of LNG exports.

"Port Arthur Phase 1 is also advancing as expected and continues to target commercial operations of Train 1 and Train 2 in '27 and '28, respectively," highlighted Justin Bird, CEO of Sempra LNG, during an earnings call.

While Sempra's ongoing projects, such as Cameron LNG Phase 2 and Port Arthur LNG Phase 2, await financial greenlights, the company's strategic moves remain aligned with its ambitious vision.

Sempra Infrastructure Partners is poised to cement its ownership stake in Port Arthur LNG Phase 1, with an anticipated 28% equity involvement, requiring approximately $1.74 billion in equity commitment, as confirmed by Bird.

Sempra reaffirmed its full-year adjusted profit outlook, projecting figures between $8.60 and $9.20. Furthermore, the company announced a two-for-one stock split, envisaged as a 100% stock dividend, with the distribution scheduled for August 21.

The rationale behind this strategic stock split, Sempra Chairman Jeffrey Martin said, lies in enhancing trading volumes and harmonizing stock prices with its utility sector peers in the S&P 500.

Despite the positive financial performance, Sempra's shares faced a minor setback, slipping 2.4% on Thursday to conclude at $143.31.

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