Sempra Energy reported increased 1999 earnings of $394 million,or $1.66 per diluted share, up 34% from 1998 but the company islooking to further accelerate earnings growth and enhance itscompetitive position. It announced a dividend reduction to $0.25per share from its previous level of $0.39 per share and said itplans to hold a Dutch auction in which it will purchase up to 36million shares, or 15% of its outstanding common stock, at asingle, per-share price within a price range of $17.50 to $20. Theprice is a premium to its closing price on Jan. 25.

“These financial initiatives give us increased financialflexibility to invest in our growing domestic and internationalbusinesses, bring our dividend payout ratio in line with ourindustry peers and help us achieve our goal of increasing ourcompound average growth rate in earnings per share to 8% to 10%over the next three years,” said CEO Richard D. Farman. “Theseinitiatives are consistent with our strategies and our objective ofbeing a focused, flexible and competitive energy services company.”

Vice Chairman Stephen L. Baum said the company has “successfullydelivered on our primary performance objectives since SempraEnergy’s creation 18 months ago. We exceeded our earnings goal in1999 and achieved profitability in our unregulated businesses oneyear ahead of target. We’re on track to meet our objective togenerate one-third of our earnings from these units by the end of2003. We’re particularly pleased with the progress of our energytrading and our international businesses. We’ve also producedreturns from our California regulated utility operations thatexceed their authorized rates of return on equity.”

“Going forward, we will intensify development of our growthbusinesses, including retail energy services, internationalutilities, trading and technology ventures,” Baum said. “At thesame time, we’ll continue to enhance the competitive position andreturns from our regulated delivery services in California and toadd generation capacity in selected markets to support our retailbusinesses.”

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