Back to top

Image: Bigstock

Edison International (EIX) Down 0.9% Since Last Earnings Report: Can It Rebound?

Read MoreHide Full Article

A month has gone by since the last earnings report for Edison International (EIX - Free Report) . Shares have lost about 0.9% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Edison International Beats on Q2 Earnings, Lags Sales

Edison International reported second-quarter 2018 earnings per share (EPS) of 84 cents from continuing operations, beating the Zacks Consensus Estimate of 82 cents by 2.4%. The bottom line declined by a penny from the year-ago quarter’s tally.

Total Revenues

Edison International's second-quarter 2018 revenues were $2,815 million, missing the Zacks Consensus Estimate of $2,955 million by 4.7%. The figure was also down 5.1% from the year-ago quarter’s tally of $2,965 million.

Operational Highlights

In the reported quarter, total operating expenses declined 4% to $2,395 million, primarily on account of a fall in purchased power and fuel expenses, in depreciation and amortization  charges as well as in impairment and other charges.

Operating income was $420 million in the reported quarter, down 10.6% from the year-ago quarter’s figure of $470 million.

Interest expenses were $180 million in the quarter, up from $159 million in the prior-year quarter.

Segment Results

Southern California Edison’s (SCE) second-quarter core earnings were 91 cents compared with 94 cents a year ago. The bottom line fell due to higher operation and maintenance expenses related to wildfire insurance as well as higher net financing costs.

Parent and other segments reported core loss of 6 cents, compared with the year-ago quarter’s earnings of 9 cents.

Financial Update

As of Jun 30, 2018, cash and cash equivalents were $99 million, down from $1,091 million as of Dec 31, 2017. Long-term debt was $13.8 billion, higher than $11.6 billion as of Dec 31, 2017.

Net cash from operating activities as of Jun 30, 2018 was $1,217 million compared with $1,438 million a year ago. Total capital expenditure amounted to $2,159 million as of Jun 30, 2018, up $1,759 million in the year-ago period.

Guidance

After the final decision from California Public Utilities Commission on Southern California Edison 2018 GRC, the company will issue 2018 earnings guidance.

How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, Edison International has a poor Growth Score of F, however its Momentum Score is doing a lot 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.

Our style scores indicate that the stock is more suitable for value investors than momentum investors.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions 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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Edison International (EIX) - free report >>

Published in