Electricity producer and distributor Sempra Energy (SRE) reported a 7 percent decline in profit for the first quarter, reflecting lower earnings at its natural gas business due to the expiration of a 10-year power supply contract. However, the company reaffirmed its earnings outlook for fiscal 2012.
Utilities revenue for the first quarter grew 7.5 percent from the year-ago period to $2.09 billion. The company's energy-related businesses recorded a 40 percent decline in revenue to $292 million. Earnings at the company's natural gas business, Sempra Natural Gas, fell 98 percent from the year-ago period to $1 million. The decrease in earnings was primarily due to the expiration of a 10-year power supply contract with the California Department of Water Resources in September 2011.
With effect from January 1, Sempra changed its accounting treatment for investment tax credits related to solar-power projects from the flow-through method to the deferral method. Sempra said its 2011 results have been restated to reflect this change in accounting method. San Diego, California-based Sempra's net earning for the first quarter were $236 million or $0.97 per share, down from $254 million or $1.05 per share in the year-ago period.
On average, seven analysts polled by Thomson Reuters expected earnings per share of $0.98 for the quarter. Analysts' estimates typically exclude one-time items.
Total revenues for the latest quarter declined 2 percent to $2.38 billion from $2.43 billion in the prior-year quarter. Looking ahead to fiscal 2012, Sempra maintained its outlook for earnings per share in a range of $4 to $4.30. Analysts expect the company to earn $4.17 for the year.
In Thursday's session, SRE is trading at $64.90, up $1.02 or 1.60 percent on a volume of 464,596 shares.
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