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Sempra Energy's Profit Up 41% on Higher Sales, Regulatory Decisions

November 07, 2003|Nancy Rivera Brooks | Times Staff Writer

Sempra Energy reported a 41% jump in third-quarter earnings Thursday, mostly because of favorable legal and regulatory decisions as well as higher electricity and natural gas sales.

In addition, Sempra Chief Executive Stephen L. Baum said the San Diego-based company would spend an estimated $50 million to repair damage caused by the recent wildfires in territories served by its utilities, San Diego Gas & Electric Co. and Southern California Gas Co.

The company expects state regulators to quickly approve reimbursement of those costs by ratepayers, Baum told investors and analysts in a conference call.

"I am particularly proud of the dedicated response by SDG&E and SoCalGas employees during last week's devastating wildfires in Southern California," Baum said.

Southern California Edison, a subsidiary of Rosemead-based Edison International, has not yet released a cost estimate to repair damage from the fires in its service territory.

For the quarter ended Sept. 30, Sempra reported net income of $211 million, or $1 a share, compared with $150 million, or 73 cents, earned in the same period last year.

The quarter's results reflected several unusual items, including a gain of $65 million from a settlement with the California Public Utilities Commission over power-purchase contracts owned by SDG&E. The company also took a $47-million write-down of the value of a gas utility subsidiary in North Carolina, a $37-million charge for litigation costs at SoCalGas and SDG&E and a $2-million charge from a settlement between Sempra's energy trading unit and federal regulators of an investigation of possible market manipulation during California's energy crisis of 2000-01.

Excluding those items, Sempra's earnings would have been $232 million, or $1.09 a share. That beat the 92-cent average estimate of analysts surveyed by Thomson First Call.

Sempra generated third-quarter revenue of $2.1 billion, up 50% from $1.4 billion in the year-earlier quarter.

Sempra stock closed up 78 cents, or 3%, at $28.33 on the New York Stock Exchange.

The SoCalGas division posted net income of $53 million, compared with $56 million in the third quarter of last year. The company blamed the decline on legal costs and losses on subleases at the unit's headquarters in downtown Los Angeles.

SDG&E saw third-quarter income soar to $120 million from $46 million a year earlier because of the power-contract settlement with the PUC, higher electricity and gas revenue and gas-purchasing incentive payments awarded by the PUC.

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