Edison International’s (EIX) adjusted EPS of $1.46 in the third quarter of fiscal 2010 jumped the Zacks Consensus Estimate of $1.18 by 28 cents. It also beat the year-ago period earnings of $1.09. Outperformance in the quarter was driven by better than expected results at both Southern California Edison (SCE) and Edison Mission Group (EMG).
On a GAAP basis, the company reported an EPS of $1.56 compared with $1.22 in the year-ago quarter.
Operational Results
Edison International’s revenue climbed 2.7% to $3.8 billion in the reported quarter, compared with $3.7 billion a year earlier. Revenues were short of the Zacks Consensus Estimate at $4.2 billion. In the third quarter, Electric Utility revenues increased $29 million to $3.1 billion, while Competitive power generation revenues increased $95 million to $691 million.
Segment Results
Southern California Edison’s GAAP EPS in the reported quarter was $1.21 compared with $1.06 in the year-ago quarter. Adjusted earnings shot up 17.4% year over year to $1.08 from 91 cents last year. The increase in adjusted earnings was due to higher authorized revenue to support rate base growth and higher capitalized financing costs.
Edison Mission Group’s reported GAAP EPS was 34 cents per share compared with 19 cents in the year-ago quarter. Adjusted losses were 37 cents per share compared with 19 cents in the same period last year. The improvement in earnings reflects higher operating revenues from Midwest Generation and Homer City, primarily from higher average realized energy prices, higher capacity revenues, and a gain from the sale of bankruptcy claims.
Edison International’s parent company and other reported GAAP EPS of 1 cent per share compared with a loss of 2 cents in the year-ago quarter, mainly due to consolidated income tax benefits.
Financial Condition
At quarter-end, Edison International reported cash and cash equivalents of $2.0 billion, up from $1.7 billion at year-end fiscal 2009. Long-term debt increased to $12.1 billion as of September 30, 2010 from $10.4 billion at the end of fiscal 2009.
The company’s cash from operating activities at the end of the reported period was $2.8 billion compared to $2.1 billion in the year-ago period.
Outlook
Edison International increased its adjusted earnings guidance for fiscal 2010 in the range of $3.45-$3.60 from the previous guidance of $3.15-$3.45, based on strong year-to-date performance. The company also raised its GAAP earnings guidance range for the period to $3.88-$4.03 from the earlier guidance range of $3.48-$3.78.
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