EdisonInternational (EIX - Analyst Report) reported earnings of 75 cents per share for the fourth quarter of 2011, beating past the Zacks Consensus Estimate of 45 cents and year-ago quarterly earnings of 58 cents per share.
On a reported basis, including one-time items, loss came in at $2.57 per share for the fourth quarter versus earnings of 51 cents per share in the year-ago quarter. The variance of $3.32 in the reported quarter between core and reported earnings was due to impairment charges for Homer City, three Midwest Generation facilities, and certain wind assets, charges resulting from reduced wind development activity, and charges from the write-off of an American Airlines aircraft lease receivable. Also included was a benefit related to the March Point sale.
Fiscal 2011 core earnings came in at $3.22 per share, beating past the Zacks Consensus Estimate of $2.91. However, fiscal 2011 earnings per share fell 26 cents versus fiscal 2010 core earnings of $3.48 per share. On a reported basis, the company reported fiscal 2011 loss of 11 cents per share compared with earnings of $3.82 per share in fiscal 2010.
Edison International's revenue fell $56 million year over year to $3,013 million in the reported quarter. Revenues also were short of the Zacks Consensus Estimate of $3,094 million.
Fiscal 2011 revenue of $12,760 million missed the Zacks Consensus Estimate of $12,807 million. Revenue was however greater than fiscal 2010 revenue of $12,409 million.
Fourth-Quarter Segment Results
Southern California Edison (SCE) segment’s fourth quarter 2011 earnings were 76 cents per share compared with 56 cents in the fourth quarter of 2010. In the reported quarter, earnings rose primarily due to rate base growth and also included a 9 cent per share benefit related to cumulative changes to deferred income taxes.
Edison Mission Group (EMG) segment’s fourth quarter 2011 GAAP loss was $3.29 per share compared with earnings of 3 cents per share in the fourth quarter of 2010. Core losses were 3 cents per share compared with earnings of 10 cents per share in the same quarter last year. Core losses resulted from lower capacity revenues, realized energy prices, and generation, and higher interest expense. This was partially offset by higher trading and renewables project income.
Edison International's parent company and other segment on a reported basis digested a fourth quarter 2011 loss of 4 cents per share compared with a loss of 8 cents per share in the same quarter last year. Core earnings were 2 cents per share in the fourth quarter of 2011 compared with core loss of 8 cents per share in the fourth quarter of 2010. Non-core charges in the fourth quarter of 2011 included a 6 cent per share consolidated deferred tax adjustment related to EMG asset impairments.
Edison International in fiscal 2011 generated $3,906 million from operating activities compared with $3,477 million in fiscal 2010. Cash and cash equivalents at the end of the reported period were $1,469 million versus $1,389 million at fiscal-end 2010. Long-term debt increased to $13,689 million compared with $12,371 million at fiscal-end 2010.
Based in Rosemead, California, Edison International engages in the supply of electric energy in central, coastal and southern California.
Edison International’s consistent performance through its solid base of stable utility operations, ongoing alternative energy projects, balance sheet strength, and a relatively cheap earnings-based valuation is partially offset by the pending decision on SCE’s 2012 General Rate Case from the California Public Utilities Commission, and risks regarding recovery of capital expansion costs.
Edison International currently retains a Zacks #3 Rank (short-term Hold rating). We maintain our long-term Neutral rating on the stock. The near-term cautious stance is also shared by its peers like American Electric Power Company Inc. (AEP - Analyst Report) and Ameren Corporation (AEE - Analyst Report).