By Pooja Menon
(Reuters) – Sempra on Tuesday lowered its 2025 profit forecast amid regulatory challenges and high costs, sending the utility’s shares down 20% in afternoon trading.
The company said in the earnings call that it lowered its annual profit forecast as the California rate case decision, which came in late December last year, was below its planning assumptions.
Utilities use rate case proceedings to determine the amount that the customers need to pay for electric and natural gas services.
It now expects current-year profit to be between $4.30 per share and $4.70 apiece, compared to its prior per-share profit outlook range of $4.90 to $5.25.
“We’ve assumed higher interest expense as a result of higher capital investments in 2025,” Sempra said on the call.
Sempra’s fourth-quarter earnings also missed Wall Street estimates due to weak demand at its Texas unit amid a milder winter. Earnings from its Texas utilities fell about 7.5% to $135 million compared with a year ago.
The U.S. Energy Information Administration had indicated that during the fourth quarter, the country experienced fewer heating degree days — a metric used to assess energy demand for space heating — compared to a year ago.
Sempra raised its capital expenditure plan for 2025-29 by 16% to $56 billion to focus on regulated utility investments in Texas and California.
Utilities are ramping up investments in projects to improve grid resiliency amid rising demand from data centers to cater to the artificial intelligence wave.
The San Diego, California-based firm reported an adjusted profit of $1.50 per share for the quarter ended December 31, missing analysts’ estimate of $1.60 per share.
(Reporting by Pooja Menon in Bengaluru; Editing by Leroy Leo and Alan Barona)
