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Edison International (EIX) Lags Q3 Earnings, Updates View

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Edison International (EIX - Free Report) reported third-quarter 2016 results, wherein adjusted earnings of $1.27 per share missed the Zacks Consensus Estimate of $1.31 by 3.1%. Reported earnings, however, was up 10.4% from $1.15 earned a year ago.

Total Revenue

Edison International's third-quarter revenues came in at $3,767 million, again lagging the Zacks Consensus Estimate of $3,839 million by 1. 9%. Nevertheless, quarterly revenues were almost in line with the year-ago tally of $3,763 million.

Operational Highlights

In the reported quarter, total operating expenses declined 2.6% to $3,072 million mainly on account of lower purchased power and fuel (3.7%), and operation and maintenance expenses (5.1%).

Depreciation, decommissioning and amortization expense was $521 million, up from $506 million in the year-ago period. Property and other taxes increased 9.5% to $92 million.

Operating income was up 14.3% to $695 million in the reported quarter.

Interest expenses were $147 million, higher than $138 million in the third quarter of 2015.

EDISON INTL Price, Consensus and EPS Surprise

 

EDISON INTL Price, Consensus and EPS Surprise | EDISON INTL Quote

Segment Results

Southern California Edison’s (“SCE”) third-quarter adjusted earnings were $1.34 per share, up 12.6% from the year-ago figure of $1.19. Earnings in the reported quarter improved primarily on the back of the timing of the implementation of the 2015 General Rate Case (GRC) proposed decision and incremental return on pole loading rate base, partially offset by higher income tax expense.

Edison International Parent and Other segment incurred third-quarter 2016 core loss of 5 cents per share, wider than the year-ago loss of 3 cents. Losses were wider due to higher operating and development costs, and lower revenue and gross margin from the sale of solar systems by Edison Energy Group.

Financial Update

As of Sep 30, 2016, cash and cash equivalents were $84 million, down from $161 million as of Dec 31, 2015. Long-term debt was $10.41 billion, lower than the 2015-end level of $10.88 billion.

Net cash from operating activities during the first nine months of 2016 was $2,500 million, compared with $2,833 million a year ago. Total capital expenditure amounted to $2,773 million during the quarter, down from $3,134 million in the prior-year period.

Guidance

The company narrowed its core earnings guidance to the range of $3.86 to $3.96 per share for 2016, compared to the prior expectations of $3.81 to $4.01.

Peer Releases

DTE Energy Company (DTE - Free Report) reported third-quarter 2016 operating earnings per share of $1.96, beating the Zacks Consensus Estimate of $1.54 by 27.3%. Reported earnings were also up 40% from the year-ago tally of $1.40.

Entergy Corporation (ETR - Free Report) reported third-quarter 2016 operating earnings of $2.31 per share, beating the Zacks Consensus Estimate of $1.95 by 18.5%. The reported number also improved 21.6% from $1.90 earned a year ago.

CMS Energy Corporation (CMS - Free Report) reported third-quarter 2016 adjusted earnings per share of 70 cents, beating the Zacks Consensus Estimate of 60 cents by 16.7%. Quarterly earnings also surged 32.1% from the year-ago figure of 53 cents.

Zacks Rank

Edison International presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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