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Sempra Energy (SRE) posted second-quarter earnings down 19% due to 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, said Sempra Chief Executive Don Felsinger. 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, commodity trading joint venture with Royal Bank of Scotland (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 noted that the company's utilities are pursuing the largest capital projects they've ever taken on, particularly 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 recently traded 0.1% higher at $52.66.

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 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 due to sharply lower natural-gas prices.

While revenue was lower, costs also were lower, offsetting the impact, said Chief Financial Officer Mark Snell.

"Generally speaking, the underlying price of commodities doesn't have much effect on our business," Snell said in an interview. "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, due to sharply lower commodity prices, particularly for natural gas, although the unit made gains from its oil and metals portfolios, the company said.

Snell noted 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 quarter 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 in June. 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 Ras Gas, a consortium of producers in Qatar.

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

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