Sempra (SRE) 2024 10-K Earnings Analysis
Sempra2024 Earnings Analysis
75/100
Sempra's FY2024 10-K for the period ended December 31, 2024 is easiest to read through $13.2B of revenue, $2.86B of net income, and negative free cash flow of $3.31B. Per SEC and company filings, texas Oncor T&D, LNG Project Execution, and California Utility Wildfire / Regulatory remain the clearest way to understand where the economics come from and why margin durability looks different here than it would at a generic peer. Gross margin was 0.0%, and the cleaner operating read comes from Texas Oncor T&D and the cash statement rather than from a missing operating-income line. Per SEC and company filings, the main question now is whether LNG Project Execution, california Utility Wildfire / Regulatory, and texas Load Growth Capacity can be managed without eroding the current cash and margin profile.
Filing analysis
Sempra 2024 10-K Analysis
This page reads Sempra's 2024 10-K annual report through the EarningsMoat framework: earnings quality, economic moat strength, capital allocation, and key risks. The current overall score is 75/100, or grade C.
SRE Earnings Quality
The earnings-quality module scores 75/100, with Operating Cash Flow: $4.91B, Multi-Segment Mix: Utility + LNG. The core question is whether reported profit is backed by operating cash flow and recurring business economics. See the earnings quality analysis guide.
SRE Economic Moat Analysis
The moat-strength module scores 83/100, with Texas Oncor T&D: Largest TX T&D, California Utility Franchise: SDG&E + SoCalGas. The test is whether the advantage can protect returns after competitors react. Read the economic moat analysis guide.
SRE Free Cash Flow vs Net Income
Operating Cash Flow: $4.91B, Free Cash Flow: -$3.31B is the fastest read on whether accounting earnings turn into cash. The capital-allocation module scores 73/100. For the diagnostic, start with cash flow vs net income.
SRE Key Risks from the Annual Report
The risk module scores 70/100, with LNG Project Execution: Port Arthur / construction, California Utility Wildfire / Regulatory: PG&E precedent. The goal is to separate ordinary disclosure from risks that can change margins, cash flow, leverage, or the moat itself.
Is SRE a High Quality Earnings Stock?
Based on this 2024 filing, SRE needs a closer read before it qualifies as a high-quality earnings candidate: the overall grade is C, and the earnings-quality score is 75/100. This is a research screen, not investment advice.
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Overall Score Trend
Earnings Quality
Operating Cash Flow is worth reading alongside the rest of the file because OCF of $4.91B is 1.71x net income of $2.86B — reflecting depreciation per the cash-flow reconciliation.
On multi-segment mix, the useful point is that sempra's multi-segment franchise (California utility + Texas Oncor + Sempra Infrastructure LNG per the segment-list) provides cross-cycle revenue and margin diversification.
Free Cash Flow matters here because FCF of -$3.31B reflects elevated growth-capex per the disclosed LNG and T&D capital-investment program communications.
FY2024 10-K shows $2.86B of net income on $13.2B of revenue, but the cleaner read is the $4.91B of operating cash flow that turned into negative free cash flow of $3.31B. Texas Oncor T&D and LNG Project Execution help explain why the margin profile stayed where it did instead of collapsing with every demand wobble. Capex still used $8.21B, so free cash flow remains the better single summary than any missing operating-margin line. Cash is moving cleanly through Texas Oncor T&D and LNG Project Execution, which reduces the odds that FY2024 earnings are being flattered by accruals.
Moat Strength
Texas Oncor T&D matters because sempra owns approximately 80% of Oncor (largest Texas transmission and distribution utility per public industry rankings) — substantial Texas load growth and grid investment tailwind per the disclosed customer-load communications.
What california utility franchise really tells you is that SDG&E (San Diego electric and gas utility) and SoCalGas (largest US natural gas distribution utility per public industry rankings) are state-granted regulated-utility franchises per the disclosed regulatory-coverage.
The practical value of sempra infrastructure lng is that sempra's LNG development-pipeline (Cameron LNG operating + Energía Costa Azul + Port Arthur LNG construction per the disclosed project-list) provides multi-decade LNG export revenue trajectory.
The competitive position starts with Texas Oncor T&D and LNG Project Execution, not with a vague appeal to scale. Per SEC and company filings, california Utility Wildfire / Regulatory and Texas Load Growth Capacity matter because they deepen switching friction, expand installed-base economics, or widen route to market reach. FY2024 ROE was 9.2%, but the more important check is that Texas Oncor T&D still turns operating advantages into cash and margin support. That does not make the business immune; it means a competitor still has to overcome Texas Oncor T&D and a functioning operating system rather than just a familiar name.
Capital Allocation
Multi-Year CapEx Program is relevant because sempra is in multi year elevated capex cycle for LNG and Texas T&D investment per the disclosed capital-investment communications.
On dividend continuity, the file suggests that sempra has paid sustained dividends with multi year increase history per the disclosed dividend-program communications.
Net Debt tells you that sempra's leverage trajectory reflects multi year LNG and T&D investment per the disclosed capital-structure communications.
negative free cash flow of $3.31B is the starting point for the capital-allocation discussion, because it defines how much room management actually had after funding Texas Oncor T&D and the broader business. Capex running at 62.3% of revenue means asset upkeep and capacity decisions remain a central part of the investment case. $1.56B of cash against $2.02B of debt means the balance sheet depends on steady cash generation rather than on idle liquidity. The dividend remains the primary recurring commitment, which makes payout coverage more important than headline EPS.
Key Risks
LNG Project Execution belongs on the watch list because multi-year construction and cost overrun risk for the Port Arthur LNG project per the disclosed project-budget communications.
The point of california utility wildfire / regulatory is that california-utility wildfire-liability exposure (per the disclosed catastrophe-recovery framework) plus California-PUC regulatory rate case execution per the disclosed regulatory-communications create regulatory and catastrophe cycle exposure.
Texas Load Growth Capacity matters as a risk because texas data center and electrification load growth requires substantial Oncor T&D capital-investment per the disclosed customer load and investment communications.
Per SEC and company filings, the risk file is not one headline issue; it is the interaction between LNG Project Execution, California Utility Wildfire / Regulatory, and Texas Load Growth Capacity. Per SEC and company filings, lNG Project Execution can travel into margins and cash conversion faster than the headline score suggests once California Utility Wildfire / Regulatory starts building. Balance-sheet risk is manageable on paper, so most of the real watch items still sit in LNG Project Execution, mix, and demand rather than in accounting optics. Per SEC and company filings, the main question now is whether LNG Project Execution, california Utility Wildfire / Regulatory, and texas Load Growth Capacity can be managed without eroding the current cash and margin profile.
Management
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This analysis is for educational purposes only and does not constitute investment advice.