Edison International ((EIX)) has held its Q1 earnings call. Read on for the main highlights of the call.
Edison International’s recent earnings call painted a picture of cautious optimism. The company reported strong financial performance, regulatory progress, and successful financing activities, but also acknowledged challenges such as potential losses from the Eaton Fire and uncertainties in wildfire legislation. Despite these hurdles, the sentiment was generally positive, reflecting confidence in navigating regulatory and operational challenges while maintaining financial guidance.
Core Earnings Per Share Increase
Edison International reported a significant increase in core earnings per share, reaching $1.37 for Q1 2025, up from $1.13 in the same period last year. This improvement comes despite the absence of a decision in the 2025 General Rate Case, showcasing the company’s robust financial health.
Rebuilding and Wildfire Mitigation Efforts
Southern California Edison (SCE) is taking proactive steps to enhance infrastructure resilience by planning to underground over 150 circuit miles in High Fire Risk Areas. These efforts aim to bolster reliability and safety following recent wildfires, reflecting the company’s commitment to mitigating wildfire risks.
Strong Regulatory Progress
SCE has achieved significant regulatory milestones, including the unanimous approval of the TKM settlement agreement by the California Public Utilities Commission (CPUC) and progress in the Wildfire Mitigation and Cost Recovery proceeding. These developments underscore the company’s effective regulatory strategy.
Affirmation of EPS Guidance
Edison International has reaffirmed its 2025 earnings per share (EPS) guidance range of $5.94 to $6.34, along with long-term EPS growth expectations of 5 to 7% from 2025 to 2028. This affirmation highlights the company’s confidence in its financial trajectory.
Successful Financing Activities
Both Edison International and SCE have successfully issued significant amounts of senior notes and long-term debt, totaling $550 million and $1.5 billion, respectively. These financing activities received strong investor support, indicating market confidence in the company’s financial stability.
Potential Material Losses from Eaton Fire
The company disclosed the likelihood of incurring material losses related to the Eaton Fire, with investigations still ongoing. While no conclusive evidence has emerged regarding the fire’s ignition source, this remains a concern for the company.
Uncertainty in Wildfire Legislation
Discussions about potential updates to California’s wildfire legislative framework are in preliminary stages, with no specific proposals advanced yet. This uncertainty presents a challenge for the company as it navigates the evolving regulatory landscape.
Interest Expense Impact
Higher interest expenses at the EIX Parent level have impacted quarterly earnings, partially offsetting the positive effects of the TKM settlement approval. This financial dynamic highlights the challenges of managing interest costs.
Forward-Looking Guidance
Edison International remains confident in meeting its 2025 EPS guidance, anticipating a 5 to 7% compound annual growth rate through 2028. The company plans to submit its 2026 Wildfire Mitigation Plan, which includes significant infrastructure investments. Additionally, a recent settlement agreement in the Wildfire Mitigation and Cost Recovery proceeding is expected to contribute positively to the 2025 guidance.
In conclusion, Edison International’s earnings call reflects a balanced outlook, with strong financial performance and regulatory achievements juxtaposed against challenges like potential fire-related losses and legislative uncertainties. The company’s reaffirmation of its EPS guidance and long-term growth expectations underscores its resilience and strategic focus in a complex operating environment.