Sempra reports strong 4th-quarter earnings
Sempra Energy reported Tuesday that net income for the fourth quarter more than doubled.
Profit jumped to $289 million, or $1.10 a share, from $125 million, or 47 cents, a year earlier, said the San Diego-based owner of Southern California Gas Co. and San Diego Gas & Electric Co.
Per-share profit was 6 cents higher than the average of 12 analyst estimates compiled by Bloomberg.
Sempra is expanding with investments in liquefied natural gas projects and a pipeline venture.
Fourth-quarter results from pipeline and storage operations swung to a $14-million profit from a $223-million loss.
The 2006 earnings included $221 million in costs to reflect a cut in the valuation of investments in two businesses in Argentina.
“The earnings looked fine,” said Jonathan Monk, who helps oversee about $23 billion in investments, including Sempra shares, at Aerion Fund Management in London. “There are some quite good things ahead.”
Sempra is building terminals in Mexico and Louisiana for imported natural gas and has teamed with Kinder Morgan Energy Partners and ConocoPhillips on a $4.9-billion pipeline to carry gas from the Rocky Mountain region to the Northeast. The company raised its cost target for the pipeline by $500 million.
Shares of Sempra rose 90 cents to $55.77. Before Tuesday, the shares had fallen 11% this year.
Sempra left unchanged its 2008 forecast for earnings per share of $3.65 to $3.85. The average analyst estimate was $3.93.
Fourth-quarter revenue fell 4.2% to $3.11 billion, Sempra said.
Sempra’s San Diego Gas & Electric and Southern California Gas utilities had combined profit of $105 million, down from $110 million a year earlier. Southern California Gas, the largest U.S. gas utility, distributes gas to 5.6 million homes and businesses.
The company’s power-generation unit had profit of $40 million, down 25% from a year earlier. Earnings from Sempra’s commodities-trading unit fell 13% to $186 million.
Sempra in July agreed to sell a majority stake in the trading business to Royal Bank of Scotland Group for $1.35 billion. Sempra has said it will raise its dividend and buy back as much as $2 billion of shares once the transaction is completed in April.
Sempra’s $975-million liquid natural gas terminal near Ensenada will begin operations next quarter instead of this quarter as planned, the company said. Its Louisiana plant still is scheduled for completion by the end of this year.
