30-04-2025
Edison International (EIX) Q1 2025 Earnings Call Highlights: Strong EPS Growth Amid Wildfire ...
Core Earnings Per Share (EPS): $1.37, compared to $1.13 a year ago.
EPS Guidance for 2025: Affirmed range of $5.94 to $6.34.
Long-term EPS Growth Expectation: 5% to 7% CAGR from 2025 to 2028, translating to $6.74 to $7.14 of 2028 EPS.
TKM Settlement Impact: Approximately $0.30 EPS contribution in Q1.
Interest Expense: Higher at EIX Parent and Other.
Wildfire Mitigation and Restoration Settlement: Awaiting CPUC approval, authorizing 100% of capital expenditures and 96% of O&M.
Capital Expenditure Forecast: Includes $1.4 billion annually on wildfire mitigation and $2 billion of FERC transmission spending.
Debt Issuance: $550 million of senior notes by EIX and $1.5 billion of long-term debt by SCE.
Warning! GuruFocus has detected 10 Warning Signs with EIX.
Release Date: April 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Edison International (NYSE:EIX) reported a significant increase in core earnings per share, rising to $1.37 from $1.13 year-over-year.
The company remains confident in meeting its 2025 EPS guidance and delivering a 5% to 7% core EPS CAGR through 2028.
Edison International (NYSE:EIX) has made substantial progress in regulatory proceedings, including a settlement agreement in its WMCE proceeding related to wildfire mitigation and restoration.
The company is executing a comprehensive plan to rebuild and harden electrical infrastructure in wildfire-affected areas, which includes undergrounding over 150 circuit miles.
Edison International (NYSE:EIX) has successfully addressed its parent debt needs for 2025 through a $550 million senior notes issuance, demonstrating strong investor support.
The company faces potential material losses related to the Eaton fire, with ongoing investigations and pending litigation.
Edison International (NYSE:EIX) has not yet received a decision in its 2025 General Rate Case, creating uncertainty in revenue recognition.
The company is dealing with increased interest expenses, partially offsetting earnings gains.
There is uncertainty regarding the legislative efforts to enhance California's wildfire framework, with no guarantees of action in the current session.
The potential liability from the Eaton fire is not yet estimable, and the company has not ruled out the possibility of its equipment being involved.
Q: What drove Edison International to disclose a potential material loss related to the Eaton fire now, and how does this relate to the $21 billion wildfire fund? A: Pedro Pizarro, President and CEO, explained that the disclosure was made due to the absence of another likely cause for the fire, despite ongoing investigations. The potential liability is not yet estimable, and while third-party estimates suggest the fire's cost might be within the fund's range, it's too early to determine the exact liability.
Q: How will potential liabilities from the Eaton fire affect Edison International's financing plan? A: Maria Rigatti, CFO, stated that the company will utilize the wildfire fund, which negates the need for issuing debt to pay claims. The financing plan will focus on normal capital needs, and the company will update its plan after the General Rate Case (GRC) decision.
Q: What are the prospects for updated wildfire legislation in California, and will it provide more certainty for investors? A: Pedro Pizarro expressed confidence that legislative leaders understand the need for expanding the AB 1054 framework. While discussions are ongoing, there is no guarantee of immediate action, but the engagement level is encouraging.
Q: How is Edison International addressing potential risks from idle or abandoned lines in its wildfire mitigation plans? A: Pedro Pizarro noted that idle lines are maintained and inspected for future use. The company continuously updates its wildfire mitigation plans based on new learnings, including adding clarity to operational manuals for grounding idle lines.
Q: How does Edison International plan to finance incremental capital expenditures, such as the ERP and AMI programs? A: Maria Rigatti explained that the company typically finances capital in line with its authorized capital structure. The current financing plan through 2028 involves minimal equity and is largely debt-financed, with capacity to meet capital needs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
