Sempra (NYSE: SRE) — 2Q26 Earnings Preview

Date clarification: August 6, 2026 is today, not tomorrow. This is therefore a pre-release preview for Sempra’s 2Q26 earnings call on August 6, 2026.

Investment view: this is a catalyst on execution, not just quarterly EPS

Sempra enters 2Q with its core utility-growth thesis intact, but the market is looking for evidence that several large strategic and regulatory milestones are moving from promised to delivered. The most important items are:

Closing timing and economics of the Sempra Infrastructure Partners (SI Partners) transaction
Oncor’s Texas regulatory and capital-spending momentum
ECA LNG Phase 1 commissioning / substantial-completion progress
Confirmation of 2026 adjusted EPS guidance of $4.80–$5.30
California regulatory recovery, wildfire exposure, and balance-sheet trajectory

The stock closed at $84.68 on August 5, down roughly 7.5% since 1Q earnings and about 11.2% from its July 8 high, suggesting the market is asking for tangible derisking rather than simply a modest earnings beat.

What matters most

1. SI Partners sale: the most important near-term corporate catalyst

Sempra agreed to sell a 45% interest in SI Partners to KKR-affiliated buyers for $9.99 billion, subject to adjustments. The transaction is central to the company’s planned simplification into a more utility-focused business and is expected to result in Sempra retaining a 25% stake while deconsolidating SI Partners’ debt.

The reported consideration includes:

$4.65 billion cash at closing
$4.14 billion plus accrued interest, due December 31, 2027
$1.2 billion plus accrued interest in longer-dated promissory notes

The gross headline value is therefore not synonymous with immediate cash proceeds. In addition, purchase-price adjustments, KKR transaction fees, development credits, capital contributions, and project-related items can affect ultimate proceeds and timing.

What investors need to hear:

Is closing still expected in 3Q26, or has it become imminent?
Have the remaining Cameron-partner, lender/export-credit-agency, and other third-party consents been obtained?
What are expected net cash proceeds at closing?
How much parent debt repayment is expected immediately after close?
What is the expected pro forma credit-metric improvement and timetable for rating-agency action?

Management previously framed rating improvement as more likely after closing plus roughly six months, rather than immediate. That makes a detailed capital-allocation update more valuable than a simple reaffirmation of timing.

Why it matters: A clean close should reduce consolidated leverage and earnings volatility, sharpen the utility narrative, and support funding for Texas capital deployment. A delay would prolong the balance-sheet overhang.

2. Texas / Oncor: the key upside engine

Oncor is now the centerpiece of Sempra’s long-term growth plan. In 1Q, Oncor received a favorable Texas base-rate settlement with:

$6.97 billion annual revenue requirement
9.75% authorized ROE
43.5% authorized equity ratio
4.94% authorized cost of debt

The order became effective June 1, with a surcharge mechanism allowing recovery of the January 1–June 1 gap during 2026. Consequently, 2Q should be the first period that more visibly captures the favorable financial effects of the rate-case outcome.

The next major event is the company’s first Unified Tracker Mechanism (UTM) filing, which seeks rate inclusion for roughly $4.4 billion of eligible transmission and distribution investment placed in service during 2025. Management expects an order and updated rates in 2H26.

What to watch in the release and call

The magnitude and accounting timing of the base-rate-case benefit in 2Q.
Any change in the expected timing for UTM interim or final rates.
Updates on the roughly $10 billion incremental Texas capital opportunity.
Whether recently identified ERCOT transmission projects are becoming more firmly embedded in the capital plan.
Execution indicators: labor availability, equipment slots, supply-chain costs, rights-of-way, and construction throughput.

Oncor’s long-term opportunity is supported by robust Texas population and load growth, including data-center-related demand. But investors should distinguish between:

the base plan, which management describes as solid even without incremental large-load conversion; and
the upside opportunity, where timing, customer commitment, ERCOT process, transmission approvals, and generation availability remain more uncertain.

Read-through: A stronger-than-expected update on firmed capital opportunities, UTM progress, and earned-ROE trajectory would be the most constructive outcome of the quarter.

3. ECA LNG Phase 1: does commissioning turn into commercial operations?

ECA LNG Phase 1 has been a major execution focus. At the May call, management said the project had introduced feed gas and expected:

first LNG production during the following month,
substantial completion in summer 2026,
recognition of LNG revenues after substantial completion, and
full commercial operations shortly thereafter.

This quarter should provide the clearest update yet. Investors should focus less on whether a commissioning cargo occurred and more on whether the project has achieved—or is on a firm path to achieve—substantial completion and contracted commercial operations.

Key questions:

Has ECA achieved substantial completion?
Have performance tests proceeded as expected?
What is the revised commercial-operations timetable, if any?
Are there remaining customer, permitting, land, construction, or cost issues?
Does management expect any residual funding obligation or impact on SI Partners transaction economics?

The project was originally expected to cost about $2.5 billion, including capitalized interest and contingency. It also carries commercial sensitivity: customers have termination rights if commercial operations do not commence by specified dates and conditions, although no notices of termination had been received as of May 7.

Earnings framework: 2Q seasonality and comparables

Sempra’s 2Q earnings are typically seasonally lower than 1Q because California utility demand is less winter-weighted. In 2Q25, Sempra reported:

Metric	2Q25
GAAP EPS	$0.71
Adjusted EPS	$0.89
Adjusted earnings	$583 million
Sempra California earnings	$259 million
Sempra Texas Utilities earnings	$208 million
Sempra Infrastructure earnings	$72 million
Parent & other	($78 million)

The 2Q25 result included meaningful non-core volatility, including Mexican foreign-currency/inflation effects, regulatory disallowances, derivative marks, and held-for-sale tax items. That history reinforces the importance of adjusted EPS and segment detail over GAAP EPS alone.

Potential 2Q26 earnings tailwinds

Oncor’s base-rate outcome, including recognition of rate relief/surcharge-related effects.
Ongoing Texas customer growth and investment-rate-base growth.
Higher California authorized base revenues and recovery on approved capital investments.
Potential retroactive benefit if SDG&E’s proposed FERC TO6 settlement advances.
Reduced depreciation at businesses classified as held for sale.
A more stable tax/derivative outcome versus prior periods.

Potential offsets

Parent-level interest expense and financing costs.
California affordability pressure, regulatory disallowance risk, and interest burden.
Infrastructure development expense and commissioning costs.
Commodity-derivative, foreign-exchange, and Mexican-inflation volatility.
Any delay or cost update tied to ECA LNG or the SI Partners closing.

Guidance: reaffirmation should be the base case, but the quality of the reaffirmation matters

Sempra reaffirmed:

2026 adjusted EPS guidance: $4.80–$5.30
2027 adjusted EPS guidance: $5.10–$5.70
Long-term EPS growth target: 7%–9%

After posting $1.51 of adjusted EPS in 1Q, the company has a reasonable early-year foundation. But the wide full-year range means the market will likely focus on the confidence level behind the guidance—not merely whether management formally maintains it.

A higher-quality reaffirmation would include:

visible 2Q Oncor rate-case benefits;
an unchanged or improved Texas capital outlook;
a firm 3Q SI Partners closing timeline;
ECA LNG reaching substantial completion or a credible near-term path to it;
clarity on debt reduction, funding, and credit metrics.

California: still a meaningful risk factor

Sempra California remains a large earnings contributor but carries the most regulatory and liability complexity.

Items to monitor

SDG&E TO6: The proposed FERC settlement would raise base ROE to 10.28%, use a 54% hypothetical equity ratio, and—if approved—be effective retroactively from June 1, 2025.
CPUC recovery matters: The company expects decisions in 2H26 on significant Track 3 wildfire-mitigation and pipeline-safety recovery requests.
Wildfire fund exposure: The potential reduction or exhaustion of California’s wildfire funding mechanisms remains an important tail risk, even though Sempra has highlighted legislative and policy momentum around a more durable statewide framework.
SoCalGas / LA fires: Litigation, restoration costs, insurance, and regulatory cost-recovery outcomes remain uncertain.

The upside is that California’s rate base and approved capital program remain supportive. The risk is that affordability and wildfire-related policy considerations can constrain cash recovery or raise the cost of capital.

Leadership transition: a secondary but relevant call topic

In July, Sempra appointed Justin Bird to become CFO upon or around the planned SI Partners closing; current CFO Karen Sedgwick is slated to become CEO and president of SoCalGas concurrently.

This makes the timing of the SI Partners close even more relevant. Investors may want management to clarify:

whether the transition timing remains linked to the transaction close;
the financial-policy priorities under the new CFO;
continuity around debt reduction, equity issuance, and the Texas-led capital plan.

Bull case for the quarter

A constructive result would feature:

Adjusted EPS at or above expectations without relying on derivatives or tax items.
Clear confirmation that SI Partners closes in 3Q, with limited remaining conditions.
A credible net-proceeds and parent-debt-reduction framework.
ECA LNG substantial completion or confirmation that it is effectively imminent.
Oncor upside crystallizing through UTM progress and increased confidence around incremental transmission projects.
An unchanged $4.80–$5.30 adjusted EPS range accompanied by more confident language around the upper half of the range.

Bear case for the quarter

The key downside scenario is not necessarily a modest 2Q EPS miss; it is a delay in the sequence of strategic milestones. Watch for:

SI Partners closing slipping beyond 3Q or new consent/financing complications.
Less favorable-than-expected net proceeds or continuing parent-level funding needs.
ECA LNG timing or cost slippage.
Limited progress converting Texas data-center-related demand into approved, funded capital projects.
Greater-than-expected California regulatory, wildfire-fund, or affordability pressure.
Continued pressure on credit metrics that reduces financial flexibility.

Bottom line

SRE’s 2Q26 report is primarily a proof-of-execution event. The near-term earnings print matters, but the stock’s re-rating potential depends more on whether management can convert its strategic roadmap into hard milestones:

close and deleverage through the SI Partners sale,
demonstrate that ECA LNG is moving into commercial operation,
capture the financial benefits of the Oncor rate outcome,
and substantiate Texas capital upside without undermining credit quality.

The most important message for investors is likely to be: How soon does Sempra become a cleaner, utility-centric company with a more visible Texas-led growth and return profile?

Sources reviewed: Sempra 1Q26 earnings release, 1Q26 earnings-call transcript, 1Q26 Form 10-Q, 2Q25 earnings release, and July 2026 Form 8-K.