With its commodities business accounting for nearly half of the profits, San Diego-based Sempra Energy Tuesday reported first quarter earnings that were up 14% over the same period last year, despite decreased or flat earnings in all of its other units, notably its two California utilities. Revenues for the first quarter were $3.3 billion, compared with $2.7 billion for the first quarter of 2005.

Net income for the first quarter was $255 million, or 98 cents/diluted share, compared with $223 million, or 92 cents/diluted share, in the same period last year. Sempra noted that first-quarter 2005 results included $59 million of net income related to what it called “favorable resolution of federal and state income tax issues from prior years.”

Sempra CEO Donald Felsinger said the company had a 52% increase in operating income during the first quarter, starting the year in a strong position to meet the company’s earnings guidance for 2006 of $3.40-3.60/share.

Partially as a reflection of favorable tax adjustments a year ago that boosted results, the two Sempra utilities — San Diego Gas and Electric Co. and Southern California Gas Co. — collectively had quarterly results that were off by about 13% from the previous first quarter. SDG&E had $47 million income and SoCalGas earned $49 million in the first quarter, compared with $59 million and $69 million, respectively, for the same period in 2005.

In contrast, Sempra Commodities, the company’s energy and metals trading arm, recorded $116 million in net income, a 300% increase over first-quarter 2005 results of $29 million. “The sharp increase was due primarily to stronger natural gas and power marketing in North America,” said Felsinger, noting that this continued “a performance trend over the past nine months of outstanding results.”

Sempra’s other major lines of business were down: Sempra Generation earned $43 million, compared with $45 million in the first quarter of 2005, due primarily to what the company said was a $15 million after-tax charge taken for an arbitration decision last month related to Sempra’s 10-year, $6.6 billion power supply deal with the California Department of Water Resources that has five years remaining (see Power Market Today, April 25).

Sempra Pipelines & Storage had $11 million in net income for the first quarter, compared with $13 million in the same period a year ago, and Sempra LNG recorded a net loss of $5 million for the first quarter, unchanged from the previous year’s first quarter.

©Copyright 2006Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.