Earnings Report
Edison International inc.
Edison International (NYSE: EIX) reported first-quarter earnings and revenue on April 27, 2021. Edison reported core earnings of $301 million or, $0.79 per share, compared to $0.63 a year ago—Edison’s EPS was up 25% y/y. Also, the company beat the estimated $0.72 vs $0.79 actual. However, this year-over-year comparison is not significant because of the delayed decision of its 2021-23 general rate case.
Southern California Edison’s (SCE) Q1-21 core earnings per share increased year-over-year mainly due to lower expense in wildfire mitigation activities and employee benefits. SEC benefited from the low expense in wildfire mitigation mainly due to fewer remediation were found through the inspection procedure.
EIX parent and others reported a $0.10 per share loss in Q1-21. The Q1-21 core earnings of $0.10 per share were unchanged compared to Q1-20.
In the first quarter earnings summary, SEC’s highlighted few key EPS drivers. Those drivers were higher revenue, lower O&M, and lower net financing cost. To begin, revenue was higher by 5 cents per share. FERC and other operating revenue provided 3 cents to revenue variance, mostly due to a higher rate base. CPUC revenue added 2 cents. O&M contributed 20 cents, primarily due to lower wildfire mitigation and lower employee benefits expense. There was also a positive contribution of 8 cents per share in net financing cost due to a couple of reasons, lower interest rate on balancing account and lower preferred dividends.
Southern California Edison remains optimistic in receiving a proposed decision on track 1 of its 2021 GRC by the end of this quarter. Additionally, SEC has requested recovery of $497 million in the revenue requirement and $679 million in the recovery of wildfire mitigation, in its track 3 filed.
Soon, SEC is requesting a $1 billion financial order that would permit it to securitize the costs permitted in GRC track 2 (approved in Jan 2021), residential uncollectible for 2020, AB 1054 capital, and wildfire mitigation.
Lastly, the wildfire profile is becoming narrow for SEC as the state increases its investments to combat wildfires. The state expects to have seven large air tankers in use this fire season. In addition, the regulator approved $536 million to quicken the land and forest management project and an extra $80 million for deploying 1,400 new CAL firefighters for this season. SEC will continue to invest in its infrastructure and new technologies to mitigate the risk of fires.