Sempra’s Profit Lifted by Trading of Commodities

Sempra Energy, owner of Southern California Gas Co. and San Diego Gas & Electric Co., said Wednesday that fourth-quarter net income rose 2.6%, helped by increased profit from trading commodities such as gas, electricity and oil.

Net income rose to $355 million, or $1.38 a share, from $346 million, or $1.46, in the fourth quarter of 2004, the San Diego-based company said. The lower per-share profit reflects an increase in outstanding shares. Sales rose 37% to $3.99 billion.

Profit at Sempra’s commodity-trading division rose 43% to $244 million, compared with $171 million a year earlier. The gains helped offset $116 million in legal costs for the settlement of claims that Sempra and El Paso Corp. limited supply to California’s gas market.

Sempra raised its forecast for 2006 profit to $3.40 to $3.60 a share, excluding gains from asset sales, from a previous outlook of $3.20 to $3.40.

“Our commodities business has been performing very well because of volatility in the marketplace,” Chief Executive Don Felsinger said in an interview. “Two months into the year, we continue to see volatility, and there’s not a whole lot of indicators that things are going to change.”

Profit from Sempra’s Southern California Gas, the nation’s largest gas utility, and its San Diego Gas & Electric utility fell a combined 4.8% to $120 million.

San Diego Gas & Electric is in talks with Calpine Corp. to buy a power plant under construction in Chula Vista, Calif., Felsinger told analysts. The plant, with a capacity of 573 megawatts, is scheduled to begin operating in January 2008. Calpine, based in San Jose, owns about 90 power plants and filed for bankruptcy protection in December.

Earnings from Sempra’s power-plant unit more than tripled to $61 million from $19 million.

Shares of Sempra rose 27 cents Wednesday to $48.72, a record. The stock has risen 24% in the last year.