Sempra (SRE) — Q2 2026 Earnings Preview

1. Earnings Preview

Key Takeaway: Setup is modestly constructive — consensus adjusted EPS of ~$1.06 is a low bar given Q1 came in at $1.51 and management affirmed full-year guidance, but the single biggest swing factor is whether Sempra can quantify the incremental ~$9B capital opportunity and provide a concrete update on the SIP/KKR transaction close, both of which management flagged for the Q2 call.

Heading into the Q2 2026 print, the bar for Sempra looks manageable: consensus adjusted EPS of ~$1.06 is well below Q1’s $1.51 and reflects typical seasonal softness, while the full-year 2026 guidance range of $4.80–$5.30 (midpoint $5.05) remains intact and affirmed. Management’s posture on the Q1 call was notably assertive — the Oncor rate case received final PUC approval with a higher authorized ROE of 9.75% and equity layer of 43.5%, and the positive financial impact was explicitly flagged as being “primarily recognized in Q2,” creating a visible earnings tailwind that the market may not have fully priced. Estimate revisions have been essentially flat since the Q1 print (FY2026 consensus moved from ~$5.17 to ~$5.14), suggesting the street is waiting for the Q2 call to update models on the incremental capital plan and SIP close timing rather than pre-positioning. The stock has underperformed XLU by roughly 3 percentage points since the Q1 print (SRE −5.4% vs. XLU −2.2%), implying the market has not priced in a beat, which creates an asymmetric setup if management delivers the promised capital update. The key wildcard is the SIP/KKR transaction close: management guided Q2 or Q3 2026, and a Q2 close would trigger immediate balance sheet improvement, eliminate equity needs through 2027, and catalyze rating agency threshold upgrades — a combination that could re-rate the stock meaningfully.

2. KPIs & Consensus Expectations

Key Takeaway: Consensus adjusted EPS of ~$1.06 is a low bar relative to Q1’s $1.51 and the full-year guidance midpoint of $5.05; the bigger swing factor is whether Oncor’s Q2 rate case benefit (flagged by management as “primarily Q2”) shows up in the print and whether management delivers the promised incremental capital update.

Table 1 — Q2 2026 Current Quarter Snapshot

Sources: Visible Alpha Consensus and Actuals Data (EPS - Diluted - Operating, Total revenues, Total capital expenditure, Capital expenditure - Texas Utilities/Oncor, FFO/Total debt); Sempra Q1 2026 Earnings Call (May 7, 2026) for guidance references.

Table 2 — Beat/Miss History (Last 8 Quarters, Top 2 KPIs)

Top 2 KPIs: (1) Adjusted EPS (Diluted Operating) | (2) Total Revenues

Pattern: SRE consistently beats on adjusted EPS (4 of last 5 quarters with a positive surprise) but persistently misses on reported revenue — a structural pattern driven by pass-through cost volatility and the reclassification of Sempra Infrastructure assets to held-for-sale. Investors and analysts have largely learned to look through revenue misses and focus on operating EPS and segment earnings.

Source: Visible Alpha Consensus and Actuals Data.

3. Guidance & Commentary Evolution

Key Takeaway: Guidance has been unchanged since the Q1 2026 call — FY2026 adjusted EPS of $4.80–$5.30 and FY2027 of $5.10–$5.70 both affirmed — but management’s tone has shifted from confident to highly assertive on Texas capital deployment, with a promised Q2 update on ~$9B of incremental opportunities that represents the key catalyst for the print.

Sources: Sempra Q1 2026 Earnings Call transcript (May 7, 2026); 8-K filed June 16, 2026 (SDG&E/SoCalGas 2028 GRC); 8-K filed July 9, 2026 (CFO appointment); Visible Alpha Consensus Data.

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: Estimates have been essentially flat since the Q1 print — FY2026 consensus EPS moved only −0.5% and FY2027 moved −0.3% — suggesting the street is in a holding pattern ahead of the Q2 call’s promised capital update; the gap between consensus and the guidance midpoint is narrow, leaving little cushion if management disappoints on the incremental plan.

The near-zero estimate drift since the Q1 print reflects a market in wait-and-see mode: analysts are holding models flat pending the Q2 call’s promised update on the ~$9B incremental capital bucket and SIP close timing. FY2026 consensus of $5.14 sits 1.6% above the guidance midpoint, providing a thin cushion — any downward revision to the incremental plan or SIP delay could push consensus below the midpoint and pressure the stock.

Source: Visible Alpha Consensus and Actuals Data (EPS - Diluted - Operating, Total revenues); as-of date May 12, 2026 used as post-Q1 baseline.

5. Stock Performance

Key Takeaway: SRE has underperformed XLU by ~3 percentage points since the Q1 print (−5.4% vs. −2.2%), with the gap widening in late July as broader utility sector weakness and pre-earnings caution weighed; the underperformance is sentiment-driven rather than estimate-driven, creating a setup where a constructive Q2 call could close the gap quickly.

SRE vs. XLU (Utilities ETF) — Indexed to 100 at Q1 2026 Earnings Date (May 7, 2026). Source: Stock Price Data (Yahoo Finance).

SRE opened the post-Q1 period roughly in line with XLU, briefly outperforming in mid-June as the Oncor rate case approval and SDG&E/SoCalGas GRC filing provided positive regulatory catalysts. The stock peaked near $95 in early July before reversing sharply, with the underperformance accelerating in late July as peers reported Q2 results and the market rotated away from higher-beta utility names. The stock entered the Q2 print at ~$86.65 (Aug 4 close), down 5.4% from the Q1 earnings date, versus XLU down 2.2% — a 3.2 pp gap that appears driven by sentiment and sector rotation rather than any fundamental deterioration. No analyst rating changes were identified in the period. The SIP/KKR close (expected Q3 2026) and the incremental capital update are the two catalysts most likely to re-rate the stock.

Sector ETF used: XLU (Utilities Select Sector SPDR Fund) — appropriate for SRE’s diversified electric and gas utility profile. Source: Stock Price Data (Yahoo Finance).

6. Material News & Developments

Key Takeaway: The most important development since Q1 earnings is the CFO transition tied to the SIP/KKR close — a signal that the transaction is imminent — followed by the SDG&E/SoCalGas 2028 GRC filing, which sets the California regulatory agenda for the next two years; together these events reinforce the pure-play utility transformation thesis heading into the print.

• July 9, 2026 — CFO Transition Announced (8-K): Justin Bird (current CEO of Sempra Infrastructure) appointed as incoming CFO, effective on or around the SIP/KKR close (expected Q3 2026). Karen Sedgwick moves to CEO/President of SoCalGas. Implication: The appointment is a strong signal that the SIP close is imminent; Bird’s infrastructure background positions Sempra to manage the post-close capital recycling into utilities. The leadership transition is orderly and internally sourced, reducing execution risk.
• June 15, 2026 — SDG&E and SoCalGas File 2028 GRC Applications (8-K): SDG&E requested $3.76B test year 2028 revenue requirement; SoCalGas requested $5.10B. Attrition adjustments of 5.5–8.7% annually through 2031. CPUC decision expected by end of 2027; new rates effective January 2028. Implication: A constructive GRC outcome would provide multi-year California earnings visibility and reduce regulatory lag. The filing is consistent with management’s stated focus on safety, reliability, and affordability.
• May 15, 2026 — SoCalGas Closes $650M Bond Offering (8-K): SoCalGas priced and closed a $650M bond offering. Implication: Demonstrates continued access to capital markets at the subsidiary level; supports the California utility capital plan without reliance on parent equity.
• May 14, 2026 — Annual Shareholder Meeting (8-K): Shareholders elected directors, ratified auditor, and rejected an independent chairman proposal. Implication: Routine governance event; rejection of independent chairman proposal preserves current board structure.
• April 17, 2026 — Oncor Wins Texas Rate Hike Approval (8-K): Final PUC approval of Oncor base rate case: ROE 9.75%, equity layer 43.5%, cost of debt 4.94%. Surcharge for Jan 1 – Jun 1, 2026 period. Implication: The single most important regulatory event since Q4 2025 earnings. Management explicitly flagged the financial benefit as “primarily Q2,” making this a direct Q2 EPS tailwind. Moves Oncor’s earned ROE meaningfully closer to the new authorized 9.75%.
• Oncor UTM Filing (April 2026): Inaugural Utility Transmission Modernization filing covering $4.4B of T&D assets placed in service since January 1, 2025. Hearing scheduled August 20; final order and new rates expected H2 2026; interim rates possible ~October 4. Implication: Reduces regulatory lag on recently placed assets; can be filed every 365 days going forward, creating a recurring mechanism to close the earned-vs-authorized ROE gap.
• Oncor 2026 RTP Filing: Oncor submitted 122 GW of large load (75 MW+) and 5.2 GW of medium load to ERCOT’s 2026 Regional Transmission Plan. Total queue now 289 GW, of which 271 GW is data center related. Implication: Reinforces the Texas load growth thesis; ERCOT Batch Zero timeline (finalize criteria July 2026, batch study July 2026–January 2027) is a near-term catalyst for incremental capital confirmation.
• March 26, 2026 — SDG&E Reaches FERC Settlement (8-K): SDG&E filed uncontested offer of settlement in T06 FERC proceeding; would increase authorized base ROE to 10.28% with 54% equity capital structure, retroactive to June 1, 2025 if approved. FERC approval expected H2 2026. Implication: A positive California regulatory development that would provide retroactive earnings benefit; approval timing aligns with the Q3/Q4 2026 reporting period.

7. Peer Commentaries — Q2 2026 Read-Throughs (Last 60 Days)

Key Takeaway: Utility peers reporting Q2 2026 results universally confirmed accelerating data center and large load demand, constructive regulatory outcomes, and rising capital plan ambitions — all direct read-throughs for Sempra’s Texas (Oncor) and California utility businesses; the ERCOT-specific commentary from Xcel and the broader Texas load growth narrative from peers provide strong sector tailwinds heading into SRE’s print.

Note: All peer commentaries below are from Q2 2026 earnings calls (reporting the current quarter), ensuring relevance as forward read-throughs for SRE’s Q2 2026 print. The Entergy Investor Day (June 9, 2026) is also included as a post-Q1 event with material forward-looking content.

NextEra Energy (NEE) — Q2 2026 Earnings Call (July 24, 2026)

Read-Through Relevance: HIGH — NEE is the largest U.S. utility and a direct benchmark for regulated utility growth, large load demand, and regulatory frameworks.

• Large load demand accelerating: FPL updated its large load expectation from 6 GW to 8 GW by 2032; currently has ~21 GW of large load interest with 12 GW in advanced discussions. Each GW of large load under FPL’s tariff is equivalent to ~$2B of CapEx earning the same ROE as other FPL investments. SRE read-through: Validates Oncor’s 289 GW queue as credible demand; the $2B/GW capital intensity benchmark is directionally consistent with Oncor’s incremental capital opportunities.
• Texas gas-fired generation pipeline: NEE is advancing development of up to 9.5 GW of gas-fired generation projects in Texas, drawn from its data center hub inventory. SRE read-through: Confirms Texas as the epicenter of AI/data center power demand; incremental generation investment in ERCOT supports Oncor’s transmission build-out thesis.
• Earnings growth reaffirmed: NEE delivered Q2 adjusted EPS of $1.15 (+9.8% YoY); reaffirmed 8%+ adjusted EPS CAGR through 2032. Energy Resources reported ~18% adjusted earnings growth YoY. SRE read-through: Sector-wide earnings momentum is intact; high-growth utility multiples remain supported.
• Regulatory framework codified: Florida governor signed a bill codifying FPL’s large load tariff into law; White House Ratepayer Protection Pledge reinforces large load cost allocation principles. SRE read-through: Constructive regulatory trend for large load cost recovery is a national theme, supporting Oncor’s ability to recover incremental transmission costs from data center customers.

Exelon (EXC) — Q2 2026 Earnings Call (July 30, 2026)

Read-Through Relevance: MODERATE — EXC is a pure-play regulated utility with significant transmission exposure; its commentary on data center demand quality and PJM capacity dynamics is relevant to the broader utility investment thesis.

• ERCOT outperformed PJM on reliability: ERCOT served a record peak demand of >91 GW without emergency actions, with power prices stable at ~$40/MWh during peak. In contrast, PJM hit a record 168 GW peak and activated emergency procedures with prices surging to $800/MWh. SRE read-through: ERCOT’s reliability performance reinforces Texas as the premier grid for large load customers, directly supporting Oncor’s competitive positioning and the durability of its 289 GW queue.
• Data center demand quality improving: EXC refined its data center pipeline from 43 GW to 36 GW by requiring Transmission Security Agreements (TSAs) and collateral, weeding out speculative projects. 4 GW have signed TSAs backed by $1B of collateral; 7 GW are high-probability. SRE read-through: Oncor’s collateral-backed queue (approaching $3B per management) reflects the same quality-filtering trend; the 122 GW RTP submission is substantiated load meeting ERCOT’s SB 6 requirements.
• Transmission upside identified: EXC identified $12B–$17B of transmission upside opportunity across competitive, existing infrastructure, data center pipeline, and state policy themes. Historically 80%–100% of four-year capital increases have been allocated to transmission. SRE read-through: Transmission is the highest-conviction capital deployment theme across the sector; Oncor’s $65B base plan is heavily transmission-weighted and benefits from the same secular tailwind.
• Earnings guidance reaffirmed: EXC reported Q2 adjusted EPS of $0.43 (in-line); reaffirmed FY2026 guidance of $2.81–$2.91 and 5%–7% annualized EPS growth through 2029 (targeting top of range). SRE read-through: Sector-wide guidance stability supports the view that SRE’s FY2026 guidance affirmation is credible.

Xcel Energy (XEL) — Q2 2026 Earnings Call (July 30, 2026)

Read-Through Relevance: HIGH — XEL operates SPS in Texas/New Mexico (Permian Basin), making it the most direct ERCOT-adjacent peer for Oncor’s Texas load growth narrative.

• Texas/Permian load growth confirmed: XEL’s SPS was selected to provide 2,400 MW of renewables and 200 MW of gas generation (~$6B investment) to serve Permian Basin oil and gas electrification. XEL plans to file large load tariffs in Texas and New Mexico in Q3 2026. SRE read-through: Permian Basin electrification is a direct demand driver for Oncor’s transmission system; XEL’s tariff filing in Texas signals a maturing regulatory framework for large load cost recovery that benefits Oncor.
• Data center pipeline growing: XEL has 1 GW of data centers in operation/construction, 1 GW under signed ESAs, and expects to secure an additional 4 GW by year-end 2027. High-probability pipeline of 20 GW. Each GW of data center requires $5–$6B of generation investment. SRE read-through: The $5–$6B/GW capital intensity benchmark is consistent with Oncor’s incremental capital opportunity sizing; the 20 GW high-probability pipeline validates the quality of large load demand in the Southwest.
• Earnings beat and guidance raised: XEL reported Q2 EPS of $0.93 vs. $0.75 in Q2 2025 (+24% YoY); reaffirmed FY2026 guidance of $4.04–$4.16 and 9%+ EPS growth through 2030. Incremental investment plan now has “line of sight to $10B+” beyond the base plan. SRE read-through: XEL’s strong Q2 beat and incremental capital visibility are the most direct positive read-through for SRE’s Q2 print and the promised ~$9B incremental capital update.
• Regulatory settlements advancing: XEL advanced settlements or decisions in six active rate cases while keeping long-term bill growth at or below inflation. SRE read-through: Constructive regulatory outcomes across the sector support the view that Oncor’s UTM filing and SDG&E’s FERC settlement will proceed without material adverse outcomes.

Entergy (ETR) — Q2 2026 Earnings Call (July 29, 2026) & Investor Day (June 9, 2026)

Read-Through Relevance: HIGH — ETR is the highest-growth utility in the sector with the most aggressive data center/AI infrastructure exposure; its commentary on hyperscaler demand, capital plan expansion, and regulatory frameworks is a leading indicator for the sector.

• Hyperscale demand pipeline massive and growing: ETR has 7–12 GW of hyperscale data center potential in its pipeline plus 3–5 GW of traditional industrial interest. Meta’s Richland Parish project is a 5 GW / $50B investment on 5,000 acres. AWS has two campuses in Mississippi and recently announced Vicksburg expansion. Conversations suggest Meta could reach 12 GW in Louisiana alone. SRE read-through: The scale of hyperscaler commitments in adjacent MISO territory validates the durability of AI/data center power demand; Oncor’s 271 GW of data center-related queue is credible in this context.
• Capital plan doubled to $67B: ETR’s 5-year capital plan has doubled to $67B from two years ago ($13B/year average), targeting $97B of rate base by 2030 (16% CAGR — “highest rate base growth in the industry”). SRE read-through: Oncor’s $65B base plan and management’s target of $90–$100B rate base by 2030 (11% CAGR) are directionally consistent with the sector’s most aggressive growth utility; the incremental ~$9B opportunity could push Oncor’s plan closer to ETR’s scale.
• Texas LNG and industrial demand: Southeast Texas is benefiting from multiple new and expanding LNG facilities; Entergy Texas secured a $200M Texas Energy Fund grant for resilience. SRE read-through: LNG-driven industrial demand in Texas is an incremental tailwind for Oncor’s transmission system beyond data centers.
• Regulatory frameworks maturing: Louisiana Governor signed an executive order requiring data centers to provide customer benefits as a condition for state tax exemptions; ETR’s “Fair Share Plus” pledge aligns with the White House Ratepayer Protection Pledge. Utilities expected to earn roughly equal to allowed ROEs across the plan period. SRE read-through: The national trend toward data center cost allocation frameworks supports Oncor’s ability to recover incremental transmission costs; the “earning at allowed ROE” expectation is consistent with Oncor’s post-rate-case trajectory.
• Q2 earnings in-line; guidance affirmed: ETR reported Q2 adjusted EPS of $1.03; affirmed FY2026 guidance and outlooks through 2030. Industrial sales grew 10% YoY. SRE read-through: Sector-wide guidance stability and industrial demand strength are positive read-throughs for SRE’s Q2 print.

Dominion Energy (D) — Q2 2026 Earnings Call (July 31, 2026)

Read-Through Relevance: MODERATE — D’s Virginia data center market is the world’s largest; its commentary on demand durability, large load frameworks, and the pending NEE merger provides sector context.

• Data center demand robust and durable: D has >53 GW of data center capacity in various stages of contracting, including ~12 GW under electric service agreements — adding >5 GW of contracts (+11%) since year-end 2025. Nine of the Dom zone’s top-10 all-time peak days occurred in 2026. SRE read-through: The acceleration in contracted data center capacity confirms that hyperscaler demand is not slowing; Oncor’s 289 GW queue is at an earlier stage but the conversion trajectory is validated by D’s experience.
• Large load framework protecting existing customers: D’s framework ensures large load customers pay their fair share of investments; 2025 rider filing approved 100% of revenue requests. SRE read-through: Consistent with the national regulatory trend; supports Oncor’s collateral-backed queue approach.
• Guidance reaffirmed; FFO/debt above 15%: D reported Q2 operating EPS of $0.79; reaffirmed all FY2026 guidance including credit targets. Full-year 2025 and Q2 LTM FFO/debt both above 15%. SRE read-through: D’s FFO/debt above 15% is a positive read-through for SRE’s own credit metric trajectory post-SIP close; SRE’s Q2 2026 consensus FFO/debt of 14.2% has room to improve.

WEC Energy Group (WEC) — Q2 2026 Earnings Call (July 29, 2026)

Read-Through Relevance: MODERATE — WEC’s data center tariff framework and capital plan execution provide a template for how regulated utilities are managing large load growth.

• Data center demand concrete and contracted: Microsoft’s Pleasant Prairie campus (first facility fully operational; 2,200+ acres acquired); Vantage/Oracle project (1,900 acres; $15B investment; 1.3 GW in 5-year forecast, 3.5 GW long-term potential). Total weather-normal electric retail sales grew 4.2% in Q2, driven by very large customers (VLCs). SRE read-through: Concrete hyperscaler commitments with collateral and minimum bills validate the quality of large load demand; Oncor’s collateral-backed queue is following the same framework.
• VLC tariff framework robust: Wisconsin PSC approved VLC tariff requiring customers to pay full share of costs; 20-year contract lengths for wind/solar; credit support required. Oracle remains committed and paying its full share. SRE read-through: The VLC tariff model is the regulatory template that Texas and other states are adopting; Oncor’s ability to recover large load costs is supported by this national precedent.
• Capital plan $37.5B; upside in 2030–31: WEC’s 5-year plan totals $37.5B; upside includes Point Beach replacement, data center growth, a potential third large customer, and transmission. Incremental capital funded with 50% equity content. SRE read-through: The 50% equity content for incremental capital is a sector norm; SRE’s equity-free base plan (through SIP proceeds) is a competitive advantage.
• Q2 EPS beat; guidance reaffirmed: WEC reported Q2 EPS of $0.91 (+$0.15 vs. Q2 2025); reaffirmed FY2026 guidance of $5.51–$5.61; guided Q3 to $0.92–$0.98. Long-term EPS growth of 7%–8% annually through 2030, accelerating to upper half from 2028. SRE read-through: WEC’s Q2 beat and guidance reaffirmation are positive sector read-throughs; the 7%–8% long-term growth rate is directly comparable to SRE’s 7%–9% target.

Duke Energy (DUK) — Q2 2026 Earnings Call (August 4, 2026)

Read-Through Relevance: MODERATE — DUK is the largest regulated utility by rate base; its commentary on capital plan upside, regulatory settlements, and data center ESA conversion is a sector bellwether.

• Capital plan upside of $5–10B identified: DUK identified $5–10B of upside to its current 5-year capital plan for additional generation and transmission in Indiana and Florida, triggered by ESA signings. Deploying >$1B/month. Load forecast in the Carolinas increased to the “high load scenario” due to newly signed ESAs. SRE read-through: DUK’s capital upside announcement is the most direct read-through for SRE’s promised ~$9B incremental capital update; the market has rewarded DUK for quantifying upside, suggesting SRE could see a similar reaction.
• Data center ESAs at 7.8 GW; pipeline 15.4 GW: DUK has secured 7.8 GW of ESAs with data center customers; expects the remaining 15.4 GW pipeline to convert to ESAs by H1 2027. Customers expected to begin taking energy as early as H2 2027. SRE read-through: The ESA conversion timeline (pipeline to contracted in 12–18 months) is a useful benchmark for Oncor’s 122 GW RTP submission; the 2027–2028 energy ramp timeline aligns with Oncor’s incremental capital deployment window.
• North Carolina rate case settlement: DUK reached a comprehensive settlement with NC public staff: 9.8% ROE, 53% equity capital structure, continuation of multi-year rate plan framework, earnings sharing mechanism up to 50 bps above allowed ROE. SRE read-through: Constructive regulatory outcomes at 9.8% ROE are consistent with Oncor’s newly approved 9.75% ROE; the multi-year rate plan framework is analogous to Oncor’s UTM mechanism.
• Q2 EPS $1.43; guidance reaffirmed: DUK reported Q2 adjusted EPS of $1.43; reaffirmed FY2026 guidance of $6.55–$6.80 and 5%–7% long-term EPS growth through 2030, with “more confident than ever” in delivering top half of range from 2028. SRE read-through: Sector-wide guidance confidence is high; DUK’s “top half of range” language mirrors SRE’s historical tendency to guide to the upper half of its range.

Peer Commentary Summary Table

Overall peer read-through is uniformly positive for SRE’s Q2 print: every peer confirmed accelerating large load demand, constructive regulatory outcomes, and rising capital plan ambitions. The most actionable read-through is DUK’s $5–10B capital upside announcement (Aug 4), which demonstrates that the market rewards utilities that quantify incremental capital — directly relevant to SRE’s promised ~$9B update on the Q2 call.

8. Insider Transaction Activity

Key Takeaway: No open-market buys or discretionary sells by executives since the Q1 print — all transactions are routine director compensation awards (phantom shares) or a single 10b5-1 planned sale; the absence of discretionary insider selling ahead of the Q2 print is a mild positive signal.

Open-market buys and sells only (Form 4 codes P/S) plus 10b5-1 plan activity. Routine director compensation awards (code A) and tax withholding (code F) are excluded from the signal table below.

All other Form 4 filings in the period (May 12–July 2, 2026) are director compensation awards (transaction code A) of phantom shares or common stock — routine annual equity grants, not open-market transactions. No open-market buys were filed by any insider since the Q1 print. The two discretionary sales (Winn 8,000 shares; Ferrero 2,600 shares) are small relative to each insider’s remaining holdings and do not constitute a meaningful negative signal. The 10b5-1 sale by Chief Legal Counsel Day is obligation-driven and should be disregarded for signal purposes.

Source: Insider Transaction Data (SEC Form 4 filings via Financial Modeling Prep).