Power generator and distributor Edison International (EIX) reported Friday an 8.2% year-over-year decline in profit for the third quarter.
Significantly lower results at its subsidiary, Edison Mission Group were partially offset by higher results at the other subsidiary Southern California Edison.
Core earnings per share for the quarter dropped 25%, yet topped analysts' expectations by five cents. The company also narrowed its GAAP earnings and core earnings forecast range for the full year 2009.
Edison is the parent company of Southern California Edison, one of the nation's largest electric utilities, and Edison Mission Group, a competitive power generation business.
In a statement, chairman and chief executive officer, Theodore Craver, Jr. said, "Edison International is on track to meet its financial objectives laid out for investors at the beginning of the year. Our strong focus on execution in managing our operations helped us to achieve a good quarter."
Third Quarter Results
The Rosemead, California-based company reported net income of $403 million or $1.22 per share for the third quarter, down from $439 million or $1.33 per share in the prior-year quarter. The year-ago quarter had income from discontinued operations of $6 million or $0.02 per share.
Excluding the non-core items, Core earnings for the quarter dropped about 25.3% to $358 million or $1.09 per share from $482 million or $1.46 per share in the year-ago quarter. On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $1.04 per share for the third quarter. Analysts' estimates typically exclude special items.
Total operating revenues for the quarter dropped to $3.66 billion from $4.29 billion in the same quarter last year. Five Wall Street analysts had a consensus revenue estimate of 3.76 billion for the quarter.
Peer Performance
Among Edison's peers, San Francisco, California-based PG&E Corp. (PCG) reported last week a year-over-year increase in profit for the third quarter to $318 million or $0.83 per share, compared to $304 million or $0.83 per share, on lower operating expenses, despite a decline in electric and natural gas operating revenues. Quarterly operating revenues decline d to $3.24 billion from $3.67 billion last year.
Another peer, San Diego, California-based Sempra Energy (SRE) is scheduled to report financial results for the third quarter on Monday, November 9, 2009. Analysts expect the company to report earnings of $1.19 per share for the third quarter, on revenues of $2.16 billion.
Segmental Details
Electric utility revenue for the third quarter decreased to $3.07 billion from $3.47 billion in the year-ago quarter. Competitive power generation revenue dropped to $592 million from $813 million in the prior-year quarter. Financial services and other revenue for the quarter totaled $7 million, down from $14 million in the comparable quarter a year ago.
Electric utility company Southern California Edison or SCE, a subsidiary of Edison International, reported a third quarter GAAP earnings of $346 million or $1.06 per share and core earnings of $300 million or $0.92 per share, higher than GAAP earnings of $235 million or $0.72 per share and core earnings of $284 million or $0.87 per share in the year-ago quarter. The increase was attributable to its 2009 General Rate Case decision as well as lower non-operating expenses, partially offset by higher income tax expense.
Another subsidiary, Edison Mission Group or EMG, reported third quarter GAAP earnings and core earnings of $61 million or $0.19 per share, sharply lower than GAAP earnings and core earnings of $208 million or $0.64 per share in the prior-year quarter. Core earnings plunged primarily due to lower income at its coal- and gas-fired projects driven by lower energy prices and from lower trading income.
Edison International parent company and other reported a narrower loss of $3 million or $0.02 per share for the third quarter from $10 million or $0.05 per share in the prior-year quarter.
Other Metrics
Edison International reported operating income for the third quarter dropped to $768 million from $965 million in the prior-year quarter. Total operating expenses was $2.90 billion, lower than $3.33 billion in the year-ago quarter.
Operating expenses include fuel expenses of $406 million, lower than $635 million in the prior-year quarter, and purchased power expense of $1.03 billion, down from $1.33 billion in the year-ago quarter.
Edison International ended the third quarter with cash and cash equivalents of $2.41 billion, compared to $3.46 billion at end of the prior-year quarter.
Nine-Month Highlights
For the nine-month period, Edison International reported net income of $637 million or $1.94 per share, lower than $999 million or $3.02 per share in the prior-year period. The latest period includes a loss from discontinued operations of $5 million or $0.01 per share.
Excluding the non-core items, core earnings for the period declined to $870 million or $2.66 per share from $1.05 billion or $3.18 per share in comparable period a year ago.
Total operating revenues for the year-to-date period dropped to $9.31 billion from $10.88 billion in the same period last year.
Outlook
Looking ahead to fiscal 2009, Edison International narrowed its GAAP earnings forecast to a range of $2.23 to $2.43 per share from the prior guidance range of $2.18 to $2.48 per share. The company now expects core earnings in a range of $2.95 to $3.15 per share, narrower than its prior outlook range of $2.90 to $3.20 per share. Analysts currently expect the company to report earnings of $3.02 per share for the full year 2009.
Stock Quote
In Friday's regular trading session, EIX is currently trading at $32.49, up $0.31 or 0.96% on a volume of 0.51 million shares. In the past 52-week period, the stock has been trading in a range of $23.09 to $35.89.
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