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Edison International (EIX - Analyst Report) reported adjusted earnings of $1.79 per share for the fourth quarter of 2012, beating the Zacks Consensus Estimate of $1.06 and year-ago quarterly earnings of 79 cents per share.
On a reported basis, including one-time items, loss came in at $1.64 per share for the fourth quarter versus a loss of $2.56 per share in the year-ago quarter.
Full year 2012 adjusted earnings came in at $3.92 per share, beating both the Zacks Consensus Estimate of $3.12 and full-year 2011 earnings of $3.31.
On a reported basis, the company reported full-year 2012 loss of 56 cents per share compared with a loss of 11 cents per share in full-year 2011.
Edison International's revenue rose $543 million year over year to $3.06 billion in the reported quarter. Revenues also were higher than the Zacks Consensus Estimate of $2.18 billion.
Full year 2012 revenue of $11.86 billion was more than the Zacks Consensus Estimate of $11.41 billion. Revenue was also greater than full-year 2011 revenue of $10.59 billion.
Fourth-Quarter Segment Results
Southern California Edison (SCE) segment’s fourth quarter 2012 earnings were $1.85 per share compared with 76 cents in the fourth quarter of 2011. In the reported quarter, earnings rose primarily due to implementation of SCE’s 2012 General Rate Case which allowed SCE to recover its revenue requirement retroactive to January 1, 2012, and record certain tax benefits.
The fourth quarter 2012 results also include rate base growth and solid operating results, offset by severance costs as SCE continues to optimize its cost structure and minimize impacts on customer rates.
Effective Dec 17, 2012, Edison International no longer consolidates the earnings and losses of Edison Mission Energy (EME) due to EME filing voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. EME and those subsidiaries in Chapter 11 proceedings retain control of their assets and are authorized to operate their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court.
Edison International has recorded a full impairment of the investment in EME as a result of the deconsolidation of EME, recognition of losses previously deferred in accumulated other comprehensive income, a provision for losses from the EME bankruptcy, and estimated tax impacts related to the expected future tax deconsolidation and separation of EME from Edison International.
The aggregate impact of these matters resulted in an after-tax charge of $3.86 per share during the fourth quarter of 2012. Including EME quarterly earnings through the date of bankruptcy filing, the fourth quarter loss was $4.07 per share.
Edison International's parent company and other segment on a reported basis digested a fourth quarter 2012 loss of 14 cents per share compared with a loss of 8 cents per share in the same quarter last year. Core losses were 6 cents per share in the fourth quarter of 2012 compared with core earnings of 3 cents per share in the fourth quarter of 2011. The decrease in core earnings was primarily due to changes in income taxes and higher operating expenses.
Edison International in full year 2012 generated $3.33 billion from operating activities compared with $3.91 billion in full year 2011. Cash and cash equivalents at the end of the reported period were $170 million versus $169 million at full year-end 2011. Long-term debt increased to $9.23 billion compared with $8.83 billion at full year-end 2011.
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 regulatory decisions from the California Public Utilities Commission, and risks regarding recovery of capital expansion costs.
Edison International currently retains a short-term Zacks Rank #3 (Hold).
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