Sempra Energy‘s third-quarter earnings took a hit because the utility is unsure it can recover from customers its costs associated with the 2007 wildfires that devastated San Diego County.
The San Diego-based company on Monday reported third-quarter net earnings of $57 million, or $0.22 per share, compared with $622 million, or $2.46 per share, in the same quarter last year.
The latest results included a charge of $208 million in connection with the San Diego wildfires, while the previous year’s earnings included a $350 million gain from the utility’s Mexican businesses.
On an adjusted basis, Sempra’s third-quarter 2017 earnings increased to $265 million, or $1.04 per share, from $259 million, or $1.02 per share, in the third quarter of 2016.
“Based on our strong operating and financial performance through the first nine months, we are on track for one of the best years in our history,” said Debra L. Reed, chairman, president and CEO of the company. “During the third quarter, we saw continued growth in our utility and infrastructure businesses, while laying the groundwork for a significant new growth platform with our agreement to acquire a majority stake in Oncor.”
In August, Sempra entered into an agreement to effectively acquire 80 percent of Oncor Electric Delivery Company, the largest electric utility in Texas.
While the California Public Utilities Commission has yet to rule on the wildfire costs, Sempra said its San Diego Gas & Electric unit “has determined that its regulatory asset no longer meets the probability threshold for recovery under applicable accounting guidance.”
As a result, the company said annual earnings per share would be in the range of $4.13 to $4.43, down from $4.95 to $5.25
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