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Why Is Edison International (EIX) Down 3.9% Since Last Earnings Report?

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A month has gone by since the last earnings report for Edison International (EIX - Free Report) . Shares have lost about 3.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Edison International due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Edison International Q1 Earnings Top, Revenues Rise Y/Y

Edison International reported first-quarter 2021 adjusted earnings of 79 cents per share, surpassing the Zacks Consensus Estimate of 76 cents by 3.9%. The bottom line also improved 25.4% from the year-ago quarter’s earnings figure.

Excluding adjustments, the company recorded earnings of 68 cents per share from continuing operations compared with 50 cents generated in first-quarter 2020.

Total Revenues

Edison International's first-quarter revenues totaled $2,960 million, which surpassed the Zacks Consensus Estimate of $2,920 million by 1.4%. Also, the top line rose 6.1% from the year-ago quarter’s $2,790 million.

Operational Highlights

In the reported quarter, total operating expenses increased 2.9% year over year to $2,561 million.

Notably, purchased power and fuel costs rose 9.2%, property and other taxes increased 13.5%, and depreciation and amortization expenses increased 8.5%. Meanwhile, operation and maintenance costs declined 4.2% year over year and expense associated with wildfire related claims plunged 36.9%.

Operating income amounted to $399 million in the first quarter of 2021, up 32.1% from the year-ago quarter.

Segment Results

Southern California Edison’s (SCE) first-quarter adjusted earnings were 89 cents per share compared with 72 cents a year ago. This improvement can be attributed to lower expenses related to wildfire mitigation activities and employee benefits.

The Parent and Other segment incurred an adjusted loss of 10 cents per share compared with the year-ago quarter’s loss of 9 cents.

Financial Update

As of Mar 31, 2021, Edison International's cash and cash equivalents amounted to $389 million compared with $87 million as of Dec 31, 2020.

Long-term debt was $20.17 billion, higher than the 2020-end level of $19.63 billion.

Net cash inflow from operating activities during the first quarter was $72 million compared with cash inflow worth $315 million in the prior-year quarter.

Total capital expenditures totaled $1,358 million at the end of the first quarter, up from $1,268 million a year ago.

2021 Guidance

Edison International announced that it will provide 2021 earnings guidance after a final decision has been adopted by the CPUC on the Southern California Edison 2021 GRC.


 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, Edison International has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Edison International has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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