Sempra Energy (SRE) posted second-quarter earnings down 19% because of a charge from a natural-gas storage project that didn't work out, but the company vowed to hit its earnings target for the year on the strength of other units.

Sempra wrote off $64 million from the Liberty Gas salt-cavern, natural-gas storage project in Louisiana, in which it holds a 75% stake, after the company experienced difficulties developing the northern end of the project area, making that part of the project uneconomical, Sempra Chief Executive Don Felsinger said. Although Sempra didn't foresee the problem and didn't include the write-off in its earnings guidance for 2009, the company will meet its full-year goals on the strength of its utilities, its commodity-trading joint venture with Royal Bank of Scotland Group PLC (RBS) and other units, he said.

"Even after the impact of the write-off of the Liberty assets, we're still on track to meet our goals for the year," Felsinger said during a conference call with analysts.

He said the company's utilities are pursuing the largest capital projects they have ever taken on. One such example is San Diego Gas & Electric, which is developing a $1.9 billion high-voltage transmission line and plans to spend $572 million to replace all the utility meters for its 2.1 million electric customers.

Shares of Sempra closed nearly 0.2% lower at $52.43.

Sempra posted a profit of $198 million, or 80 cents a share, down from $244 million, or 98 cents, a year earlier. The latest period included 26 cents in write-downs at its pipeline and storage unit, while the prior year had gains from the formation of the trading venture with the RBS.

Analysts polled by Thomson Reuters most recently were looking for earnings, excluding items, of 97 cents a share.

Revenue dropped 33% to $1.69 billion because of sharply lower natural-gas prices.

Costs also were lower, offsetting the impact, Chief Financial Officer Mark Snell said.

"Generally speaking, the underlying price of commodities doesn't have much effect on our business," Snell said. "We contract for long-term periods...for the vast majority of our revenues."

At Sempra's utilities, earnings were up 15% on higher margins, though gas sales volume fell 6.5% and electricity deliveries dropped 1.1%.

At its generation business, which sells wholesale power, earnings jumped 43% on prior-year mark-to-market losses as power sold edged down 0.4%.

Commodities earnings fell on the prior-year gains. Sempra saw net earnings of $85 million from total joint-venture quarterly earnings of $142 million. Earnings from the joint venture were less than half what they were a year ago, because of sharply lower commodity prices, particularly for natural gas, although the unit made gains from its oil and metals portfolios, the company said.

Snell said that, while lower commodity prices led to lower earnings at its commodity-trading joint venture with RBS, the second quarter of 2008 was a record one for the unit.

Sempra's liquefied natural-gas unit posted a smaller loss than a year ago and is expected to post a profit in the fourth quarter, the company said. Sempra's Cameron LNG receiving terminal began operating earlier this month, and its Mexican LNG terminal started receiving cargoes last year. In addition to cargoes expected to arrive under contract, Sempra said it expects spot cargoes to come to its Louisiana LNG terminal this summer as part of an agreement with RasGas Co., a joint venture in Qatar owned by Qatar Petroleum and Exxon Mobil Corp. (XOM). Most of RasGas' production is sold to companies in South Korea, India, Italy, Belgium and Spain, but some of it is expected to flow to the U.S. as production expands.

Sempra expects its LNG terminal in Baja California, Mexico, to start taking in LNG from Indonesia later this year.

Sempra reiterated its 2009 earnings target of $4.35 to $4.60 a share.

-By Cassandra Sweet, Dow Jones Newswires; 415-269-4446; cassandra.sweet@dowjones.com