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Edison International (EIX - Analyst Report) reported adjusted earnings of 77 cents per share for the first quarter of 2013, comfortably surpassing both the Zacks Consensus Estimate of 64 cents and the year-ago quarterly earnings of 54 cents per share.

The beneficial results were partly driven by Southern California Edison (“SCE”). It followed the implementation of rates approved under General Rate Case (“GRC”) of the California Public Utilities Commission (CPUC) in Nov 2012.

On a reported basis, including one-time gain of 6 cents per share, earnings came in at 83 cents per share, significantly up from 28 cents per share.

Operational Highlights

Edison International's revenue was $2,632 million, up 9% year over year. The figure was also above the Zacks Consensus estimate by $479 million.

Operations and maintenance expenses were $873 million, down 7.7% year over year. Total operating expenses were $2,140 million, up 5.6% year over year.

Increase in operating expenses could not offset the increase in operating revenue resulting in an operating income of $492 million, up 26.4%.

Segment Results

Southern California Edison (“SCE”) segment’s first quarter earnings were 78 cents per share compared with 56 cents in the year-ago quarter. The results were driven by timing, and tax benefits from incremental repair deductions and lower operating expenses.

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 its subsidiaries 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 deconsolidation, recognition of losses previously deferred in accumulated other comprehensive income, a provision for losses from the EME bankruptcy, and estimated tax impact related to the expected future tax deconsolidation and separation of EME from Edison International. Results for Edison Mission Energy are reported as non-core discontinued operations.

Edison International's parent company and other segment digested a quarterly loss of 1 cent per share in the reported quarter versus a loss of 2 cents in the year-ago quarter.

Financial Update

As of Mar 31, 2013, cash and cash equivalents were $115 million down from $170 million as of Dec 31, 2012. Long-term debt was $8,829 million, down from $9,231 million at the end of Dec 31, 2012. Net cash provided by operating activities were $506 million versus $677 million in first quarter of 2012.

Guidance

The company maintained its adjusted earnings per share guidance in the range of $3.45 to $3.65 per share for 2013.

Peer Results

Recently, Mich.-based CMS Energy Corporation (CMS - Analyst Report) announced first-quarter 2013 earnings per share of 53 cents on both adjusted and GAAP basis, beating the Zacks Consensus Estimate of 46 cents. Earnings were 43.2% higher than 37 cents earned in the year-ago quarter.

Zacks Rank

Edison International presently retains a short-term Zacks Rank #3 (Hold). Stocks worth considering are ALLETE, Inc. (ALE - Snapshot Report) and Calpine Corp. (CPN - Snapshot Report), both with a Zacks Rank #2 (Buy).

 

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