Sempra reported third-quarter 2026 results on Thursday, November 5, and the headline invites a second reading. Adjusted earnings were $917 million, or $1.40 per share, up 26% from $728 million, or $1.11 per share, a year earlier, and ahead of the Zacks consensus estimate of $1.20 by 16.7%. GAAP earnings were $877 million, or $1.34 per share, against $77 million, or $0.12 per share, in the third quarter of 2025. Revenue of $3.19 billion rose just 1.3% from $3.15 billion and missed the roughly $3.35 billion consensus. The real story is the split underneath: Texas did the work, California stood still, and a proposed regulatory decision now carries the 2027 story.
Sempra is the latest in this publication’s third-quarter utility-earnings coverage, after Entergy, Dominion, Eversource, and NorthWestern. Chairman and CEO Jeffrey W. Martin’s framing is explicit: Sempra’s mission is “to build America’s leading utility growth business,” funded by selling down infrastructure and reinvesting in Texas and California wires. The numbers support the direction. Whether they support the pace is the question this quarter leaves open.
The two EPS numbers
Start, as this publication’s earnings-report checklist prescribes, with the two EPS numbers and the reconciliation between them. The gap between GAAP and adjusted earnings is small — $40 million, or 6 cents a share — but the items inside it are large and mostly offsetting: a $149 million after-tax charge at Sempra California from regulatory disallowances, $67 million of net unrealized losses on commodity derivatives, and a $65 million hit from foreign currency and inflation on monetary positions in Mexico, partly offset by a $97 million gain on the August sale of Ecogas Mexico and $16 million of net unrealized gains on Port Arthur LNG Phase 1 interest rate swaps.
The $149 million California disallowance is the item to read first, because it is the only one that is a regulatory judgment rather than a market movement. It stems from CPUC proposed decisions on the 2024 general rate case Track 3 request and the transmission integrity management program application, concentrated at Southern California Gas — $150 million pre-tax from Track 3 and $66 million pre-tax from the integrity-management decision, against the $149 million after-tax charge. Proposed decisions are not final orders, but the charge is booked, and it is why California’s GAAP earnings look worse than its operating performance.
The GAAP comparison with a year ago is where the flattery lives. Third-quarter 2025 GAAP earnings of $0.12 per share were depressed by a $514 million net income-tax expense from classifying Sempra Infrastructure Partners as held for sale, plus a $78 million charge from a valuation allowance against foreign tax credits carried forward from the Tax Cuts and Jobs Act. Together those items cost roughly 91 cents a share in the year-ago quarter, explaining most of the $1.22 GAAP increase. The adjusted comparison, up 26%, is the honest one — still a strong quarter, but one built on Texas. Nine months tell the same story at lower volume: GAAP earnings of $2.710 billion, or $4.13 per share, against $1.444 billion, or $2.21, while adjusted earnings were $2.670 billion, or $4.07, against $2.253 billion, or $3.45 — an 18% increase on the comparable measure against 87% on GAAP, on revenue that fell to $9.84 billion from $9.95 billion.
Texas: the engine
Sempra Texas Utilities earned $460 million in the quarter, against $306 million a year earlier — a $154 million increase that accounts for more than the entire company’s adjusted earnings growth. CFO Karen Sedgwick’s walk on the call attributes it to higher equity earnings from Oncor — new base rates, the Unified Tracker Mechanism, the system resiliency plan, and higher customer consumption, primarily weather-driven — partly offset by higher interest, depreciation, and operating and maintenance expense.
The mechanisms are why the Texas earnings are durable rather than circumstantial. New base rates from Oncor’s comprehensive base rate review went into effect on June 1, 2026, after the PUCT’s April order. The Unified Tracker Mechanism, authorized by Texas House Bill 5247, combines six interim capital tracker filings into one annual proceeding; its first filing, in April, sought recovery of about $4.4 billion of 2025 capital investment and a net revenue increase of roughly $550 million. The system resiliency plan is the wildfire-mitigation and hardening program whose revenues are now flowing through. None of these is a one-time item: they are the plumbing through which capital spending becomes earnings, and they are now all in service at once.
Oncor set a new all-time system peak demand record of 33.3 gigawatts during the quarter, 6% above the prior year’s record of 31.4 GW. ERCOT’s Batch Zero process, validating the large-load queue, has classified about 24 GW of load in Oncor’s footprint as base load — including 10 GW already energized — and 21 GW as studied load, backed by financial security and site control. ERCOT is re-checking about 80% of Batch Zero customers’ submissions, with validation due in mid-December. The queue is being tested, not merely counted.
Transmission is where the Texas story becomes a multi-year construction program. Oncor has submitted certificates of convenience and necessity for the 765-kilovolt Import Path 1 and Import Path 2 projects of the Permian Basin Reliability Plan, and in August the PUCT approved both segments of Import Path 1. That approval faces motions for rehearing and appeals — even approved transmission in Texas is litigated transmission.
The capital plan gets bigger
The quarter’s most consequential announcement is not an earnings figure but a capital plan. Oncor projects its 2027–2031 base capital plan to increase by approximately 20% relative to its 2026–2030 base plan of $47.5 billion, which already envisioned roughly $9 billion of spending in 2026, rising to about $10 billion in 2027 and $10.1 billion in 2028. Sempra expects to finalize the 2027–2031 plan on the fourth-quarter earnings call in February. A 20% increase on a $47.5 billion base implies roughly $9 billion of additional planned spending over five years.
The increase reflects the addition of 2031 to the planning period, continued load growth, and projects moving from an incremental opportunities list into the base plan, supported by projects approved by the PUCT or endorsed by ERCOT, according to Oncor CEO Allen Nye on the call. Note what it excludes: the Eastern STEP 765-kV projects and a system resiliency program, and projects associated with ERCOT’s Batch Zero large-load process. The spending is already happening at scale: Sempra’s businesses invested approximately $10 billion in the first nine months of 2026, and operating cash flow rose to $4.68 billion from $3.38 billion a year earlier. Long-term debt and finance leases stood at $31.51 billion at September 30, against $28.98 billion at the end of 2025. Management is now building a funding plan around asset sales, transaction proceeds, the at-the-market equity program, and hybrid and debt financing.
California: flat, with a 2027 warning
Sempra California is the quarter’s counterweight. Adjusted earnings were $372 million, against $370 million a year earlier — essentially flat, and the walk underneath the flatness is the whole story. Higher CPUC-based operating margin, net of operating expenses, and higher electric transmission margin added $46 million; roughly $44 million of offsets took it back — lower income-tax benefits, higher net interest expense, and lower net regulatory interest income. The operating business improved; the tax and financing lines gave it back. The backdrop was demanding: San Diego Gas & Electric reached a new all-time peak of 5.2 GW during one of the region’s most demanding periods for the electric system in more than a decade.
The warning is dated October 29. On that day, the CPUC issued a proposed decision denying SoCalGas and SDG&E’s request to correct the 2024 general rate case capital attrition mechanism to reflect the appropriate post-test-year capital revenue requirement for 2027. Sempra views its request as a correction to an error in how post-test-year capital investment was accounted for, and it continues to pursue other regulatory avenues. If it is not successful, Sempra California expects its 2027 earnings to be at the low end of its segment guidance range, unless mitigated through business initiatives. The revenue requirement at issue is $188 million, according to Sedgwick on the call. The exposure is limited to 2027, management says, because new rates take effect in January 2028 under a pending rate case, and Martin said it would not affect the updated long-term growth rate guidance in February. A $188 million revenue requirement is not a rounding error, but a one-year exposure with a rate-case reset behind it is manageable, provided the reset arrives on schedule.
Infrastructure and the shrinking company
Sempra Infrastructure earned $237 million on an adjusted basis, against $184 million a year earlier — a $53 million increase driven by lower depreciation, reduced operating costs, and higher net interest income. The segment’s strategic direction matters more than its quarter: Sempra is selling it down. The sale of a 45% equity interest in Sempra Infrastructure Partners to affiliates of KKR remains on track and is expected to close in the next two weeks, with the two remaining closing conditions — Cameron LNG partner and Japanese lender consents — described as in good shape. The partnership also completed the sale of Ecogas Mexico in August, producing the $97 million gain excluded from adjusted earnings. The logic, in Martin’s words, is capital recycling to simplify the business model, strengthen the financial position, and support long-term utility growth in Texas and California, with the KKR proceeds expected to help pay down debt. Parent and other companies reported an adjusted loss of $152 million, wider than the $132 million loss a year earlier, on lower tax benefits and unfavorable investment performance, partly offset by lower preferred dividends. After the closing, Sempra Infrastructure CEO Justin Bird becomes chief financial officer and Sedgwick becomes president and CEO of SoCalGas.
The guidance math
Guidance is the promise that matters most, and Sempra used this report to raise one range, point to the top of another, and affirm a third with a caveat attached. Full-year 2026 GAAP EPS guidance was raised to $7.41–$8.41 per share; management is guiding to the high end of the 2026 adjusted EPS range of $4.80–$5.30; and 2027 EPS guidance of $5.10–$5.70 was affirmed, along with the 7% to 9% projected long-term EPS growth rate — with the qualification that pending regulatory outcomes could put Sempra in the lower half of the 2027 range unless mitigated.
Do the arithmetic the checklist prescribes. Nine-month adjusted EPS stands at $4.07. Subtract that from the $4.80–$5.30 range and the fourth quarter must deliver $0.73 to $1.23 per share to land inside it; the high end, where management is pointing, implies about $1.23. A heavy fourth quarter against a $1.40 third quarter, but plausible: the Texas mechanisms are fully in service and the fourth quarter carries no repeat of the California disallowance. The 2027 range implies adjusted EPS growth of roughly 2% to 12% off the $5.05 midpoint of the 2026 range — wide for a company guiding to 7% to 9% long-term growth, and the width is the California proposed decision and the February capital plan update.
The durable-versus-one-off ledger is the right way to close the quarter. Durable: new Oncor base rates effective June 1, the Unified Tracker Mechanism, system resiliency plan revenues, higher CPUC-based operating margin, and higher electric transmission margin in California — all recurring, all growing with rate base. One-off or timing: weather-driven consumption in Texas, the $97 million Ecogas gain, the absence of last year’s $514 million tax charge that flatters the GAAP comparison, and the tax-benefit timing that held California flat. Read the 26% as a level shift in the run rate, not a growth rate to extrapolate.
What to watch
Five markers, in order of consequence. First, the February capital plan: the finalized 2027–2031 plan and the updated long-term growth rate. Second, the California proposed decision: whether Sempra’s challenge to the October 29 ruling succeeds and the $188 million revenue requirement is corrected. Third, the KKR closing: the 45% stake sale closing within two weeks and the financing plan for spending through 2031. Fourth, ERCOT’s Batch Zero validation, due in mid-December, and whether the 24 GW of base load and 21 GW of studied load survive scrutiny. Fifth, the fourth-quarter print: roughly $1.23 per share lands at the high end of the $4.80–$5.30 range.
Sempra’s quarter is a regulated-growth quarter: Texas rate-base growth and California transmission margin doing the work, the prior-year comparison flattered by a weak third quarter of 2025, the current quarter helped by weather. The durable part — approved rates, trackers, a capital plan growing 20% — is why the utility-growth thesis survives this report. The fragile part is California, where one proposed decision worth $188 million decides whether 2027 lands in the top or bottom half of guidance. The growth story is real, and it runs through two commissions that still have to rule.
None of this is investment advice, and nothing here recommends buying, selling, or holding any security. It is a reading of one quarter’s evidence: a $1.40 adjusted print against a $1.20 consensus, a $154 million Texas increase built on rates and trackers, a flat California quarter with a $149 million disallowance behind it, a capital plan growing by a fifth, and a 2027 guidance range affirmed with a warning attached.