Edison International (EIX) Lags Q2 Earnings And Revenues

Edison International (NYSE:EIX) reported second-quarter 2016 results, wherein adjusted earnings of 85 cents per share came in below the Zacks Consensus Estimate of $1.00 by 15%. The quarterly number also declined 26.7% from $1.16 a year ago, impacted by taxes and rate-case decision.

Total Revenues

Edison International's second-quarter revenues were $2,777 million, lagging the Zacks Consensus Estimate of $2,813 million by 1.3%. Quarterly revenues also declined 4.5% from $2,908 million a year ago.

Operational Highlights

In the reported quarter, total operating expenses increased 0.5% to $2,396 million mainly on account of higher depreciation, decommissioning and amortization expenses (up by 5%).

Total fuel and power purchase cost was $1,064 million, down from $1,078 million in the year-ago period. Total operations and maintenance expenses decreased 3% to $721 million.

Operating income was down 27.3% to $381 million in the reported quarter.

Interest expenses were $144 million, higher than $138 million in the second quarter of 2015.

Segment Results

Southern California Edison’s (“SCE”) second-quarter adjusted earnings were 97 cents per share, down 17.8% from the year-ago figure of $1.18. Earnings in the reported quarter declined due to income-tax benefits recorded in the same period last year and the delay in receiving a rate-case decision for the utility.

The company said that it witnessed $100 million or 31 cents per share in income-tax benefits in the second quarter of 2015, hurting the comparison for the latest quarter. The timing of the rate-case decision in 2015 also affected data. Hence, the company pointed out that year-over-year comparisons were “not meaningful.”

Edison International Parent and Other segment incurred a second-quarter 2016 core loss of 11 cents per share, wider than the year-ago loss of 2 cents per share.

Financial Update

As of Jun 30, 2016, cash and cash equivalents were $111 million, down from $161 million as of Dec 31, 2015. Long-term debt was $10.85 billion, lower than the 2015-end level of $10.88 billion.

Net cash from operating activities during the first half of 2016 was $1,429 million, compared with $1,768 million a year ago. Total capital expenditure amounted to $1,828 million during the period, down from $2,197 million in the year-ago period.

Guidance

The company reaffirmed its core earnings in the range of $3.81 to $4.01 per share for 2016.

The company projected capital expenditure of $7.9–$8.1 million over 2016–2017 at SCE.

Peer Releases

DTE Energy Company (NYSE:DTE) reported second-quarter 2016 operating earnings per share of 98 cents, beating the Zacks Consensus Estimate of 90 cents by 8.9%. Reported earnings were also up 28.9% from the year-ago figure of 76 cents.

American Electric Power Co., Inc. (NYSE:AEP) reported second-quarter 2016 operating earnings of 95 cents per share, beating the Zacks Consensus Estimate of 90 cents by 5.6%.

CMS Energy Corporation (NYSE:CMS) reported second-quarter 2016 adjusted earnings per share of 45 cents, beating the Zacks Consensus Estimate of 35 cents by 28.6%. Quarterly earnings also increased 80% from the year-ago figure of 25 cents.

Zacks Rank

Edison International presently carries a Zacks Rank #3 (Hold).