Sempra Beats Estimates, Unveils $65B Grid Modernization Plan

SAN DIEGO, CA – May 07, 2026 – Energy infrastructure giant Sempra reported a strong start to 2026, posting first-quarter earnings that surpassed analyst expectations and reaffirming an ambitious strategy centered on a record $65 billion, five-year capital investment plan aimed at modernizing the energy networks of Texas and California.

The San Diego-based company announced GAAP earnings of $1.04 billion, or $1.58 per diluted share, a significant increase from the $906 million, or $1.39 per share, reported in the same quarter last year. On an adjusted basis, which strips out certain one-time items and market fluctuations, earnings were $991 million, or $1.51 per share, beating consensus estimates and demonstrating underlying operational strength.

"At Sempra, our first quarter results represent a great start to the year," said Jeffrey W. Martin, chairman and CEO of Sempra, in a statement. "We remain focused on executing our strategy to modernize and extend the reach of our utilities and complete our capital recycling initiatives as we continue to grow the business."

The results underscore a pivotal moment for Sempra as it doubles down on its core utility businesses in the nation's two largest state economies, divesting non-essential assets to fuel a massive infrastructure overhaul designed to enhance grid reliability, safety, and resilience for decades to come.

A Strategy of Investment and Simplification

At the heart of Sempra's forward-looking strategy is its record 2026-2030 capital plan of approximately $65 billion, a notable increase from its previous five-year plan. An overwhelming 95% of this capital is earmarked for its regulated utilities in California and Texas. The company has already deployed approximately $3 billion in the first quarter of 2026, signaling an aggressive pace of execution.

This massive investment is being funded through a dual approach of operational cash flow and a disciplined "capital recycling" program. Sempra is streamlining its business model by selling non-core assets to raise capital for reinvestment. Key to this initiative are the pending sales of its interests in Sempra Infrastructure Partners (SI Partners) and Ecogas México. The company confirmed that these transactions are progressing, with regulatory approvals from FERC and antitrust bodies in Mexico and Korea already secured for the SI Partners deal. Both transactions are expected to close in the second or third quarter of 2026, which the company expects to be accretive to earnings.

This strategy allows Sempra to de-risk its portfolio, reduce debt, and concentrate its financial firepower on what it sees as its primary mission: building America's leading utility growth business. More than half of the planned capital expenditures are designated for Texas, where Sempra aims to generate over 50% of its total earnings by 2030, reflecting the state's rapid economic and population growth.

Navigating the Regulatory Landscape

A critical component of Sempra's success lies in its ability to navigate complex and politically sensitive regulatory environments. The company scored a major victory in April when the Public Utility Commission of Texas (PUCT) approved a base rate settlement for its subsidiary, Oncor Electric Delivery Company.

The order provides Oncor with an annual revenue requirement of approximately $6.97 billion, an increase of about 8.7% over its adjusted annualized revenues. It also authorizes a favorable 9.75% return on equity. This decision not only provides a stable and predictable revenue stream but also strengthens Oncor's financial position, enabling it to fund the extensive investments needed to support the booming Texas economy and its ever-growing energy needs. The new rates are retroactive to January 1, 2026, providing an immediate financial uplift.

In California, Sempra's utilities, Southern California Gas Company (SoCalGas) and San Diego Gas & Electric (SDGE), continue to focus on safety and affordability while aligning with the state's ambitious decarbonization goals. The company highlighted how SoCalGas's natural gas storage fields played a crucial role during January's Winter Storm Fern, helping customers avoid potential price spikes and demonstrating the value of its infrastructure in maintaining energy stability. Meanwhile, SDGE has filed a settlement offer in its Federal Energy Regulatory Commission (FERC) rate proceeding, seeking a 10.28% return on equity, with a final decision anticipated later this year.

Investor Outlook and Financial Health

While Sempra's adjusted earnings per share beat forecasts, its total Q1 revenues of $3.66 billion fell short of analyst expectations and represented a 3.9% decrease from the prior year, leading to a modest dip in the company's stock price in pre-market trading following the announcement. This highlights a potential investor focus on top-line growth in addition to bottom-line profitability.

Despite the revenue miss, the company's long-term outlook remains bullish. Sempra affirmed its full-year 2026 adjusted EPS guidance range of $4.80 to $5.30 and its projected long-term annual EPS growth rate of 7% to 9%. Looking further ahead, the company introduced guidance for 2027 with an EPS range of $5.10 to $5.70 and an ambitious 2030 EPS outlook of $6.70 to $7.50, signaling strong confidence in its strategic plan.

This confidence is backed by a history of consistent performance, with adjusted earnings showing a steady upward trend over the past several years, even as GAAP earnings have seen more volatility. The company's commitment to shareholder returns was also evident in its recent dividend increase, which brought the annualized dividend to $2.63 per share for 2026. This combination of growth, strategic clarity, and shareholder returns continues to make Sempra a closely watched name in the utilities sector.