Sempra Energy (SRE) stock surged 5.04% in Wednesday's pre-market trading following the company's Q4 2024 earnings release and updated growth plans. While Sempra lowered its 2025 earnings guidance due to regulatory challenges and higher costs, the company highlighted its remarkable growth prospects in Texas, driving optimism for long-term earnings potential.

The key highlights from Sempra's earnings release and growth outlook include:

2025 EPS Guidance: Sempra revised its 2025 EPS guidance range to $4.30 to $4.70, primarily due to the impact of Oncor Electric Delivery Company, its Texas utility, filing a comprehensive base rate review, as well as regulatory challenges in California and changes in natural gas price assumptions.

Long-Term EPS Growth Rate: Sempra raised its projected long-term EPS growth rate to 7% to 9%, reflecting the company's confidence in its ability to deliver sustained growth driven by its robust capital plan and significant growth opportunities in Texas.

Texas Growth Opportunities: Oncor, Sempra's Texas utility, announced a record five-year capital plan of $36 billion, an increase of 50% over the previous plan. This plan is driven by unprecedented growth in the region, including a projected 36-gigawatt increase in peak load by 2031, primarily from large commercial and industrial customers, such as data centers.

Incremental Texas Investment Potential: In addition to the $36 billion base plan, Oncor expects to make an additional $12 billion in capital investments over the 2025-2029 period, driven by factors like system resiliency updates, new transmission projects, and growth in large commercial and industrial customers.

While Sempra's 2025 guidance was lowered due to near-term challenges, the company's long-term earnings potential is bolstered by its significant growth opportunities in Texas. With Sempra targeting half of its earnings to come from its Texas platform by the end of the decade, the company's robust capital plan and exposure to the booming Texas market position it for strong earnings growth in the years ahead.