Edison International ((EIX)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Edison International’s recent earnings call painted a picture of robust financial health and legislative progress, although challenges related to wildfire liabilities persist. The company demonstrated strong financial performance, bolstered by legislative achievements that enhance financial stability and support safety investments. However, the shadow of wildfire liabilities continues to loom, posing significant financial implications.
Strong Core EPS Growth
Edison International reported impressive growth in its core earnings per share (EPS) for the third quarter, reaching $2.34, a significant increase from $1.51 in the previous year. This growth is noteworthy, even though the comparison is somewhat skewed due to adjustments related to the 2025 General Rate Case final decision.
Legislative Success with SB 254
The passage of SB 254 marks a constructive legislative achievement for Edison International. This bill supports investor-owned utility (IOU) customers and addresses wildfire risks by establishing an $18 billion continuation account, providing stakeholders with greater certainty and enhancing the existing framework.
Progress on Wildfire Mitigation
Edison International’s subsidiary, Southern California Edison (SCE), has made significant strides in wildfire mitigation. By the end of the year, SCE will have hardened nearly 90% of its distribution lines in high fire risk areas, totaling over 14,000 miles. This demonstrates the company’s commitment to safety and reliability through substantial investments.
Regulatory Achievements
The California Public Utilities Commission (CPUC) approved the TKM Settlement, allowing for the recovery of approximately $1.6 billion in wildfire-related costs. Additionally, SCE reached a settlement in the Woolsey fire proceeding, marking significant regulatory progress.
Load Growth Projections
Edison International anticipates a compound annual growth rate (CAGR) of up to 3% in near-term load growth, with long-term electricity sales expected to nearly double over the next two decades. This growth is driven by increased electrification and rising residential and industrial demand.
Eaton Fire Liability Uncertainty
Despite reaching a settlement with an insurance claimant, uncertainty remains regarding the total potential losses from the Eaton Fire. SCE has not identified any alternative sources of ignition, leaving some ambiguity about future liabilities.
Challenges with Preferred Equity Refinancing
Edison International faced challenges in optimizing financing costs, with $0.10 per share costs associated with early refinancing of preferred equity. These costs were included in the narrowed 2025 core EPS guidance, reflecting ongoing financial management challenges.
Forward-Looking Guidance
Edison International provided updated guidance during the earnings call, highlighting a significant increase in third-quarter core EPS and narrowing its 2025 core EPS guidance range to $5.95 to $6.20. The company reaffirmed its 5% to 7% core EPS growth target through 2028 and outlined a four-year capital plan with investments totaling $28 billion to $29 billion. Additionally, Edison International emphasized its strong financial position, aiming to maintain a 15% to 17% FFO to debt ratio without requiring equity issuance through 2028.
In summary, Edison International’s earnings call showcased strong financial performance and legislative advancements, despite ongoing challenges with wildfire liabilities. The company’s commitment to safety investments and strategic growth plans positions it well for future success, although uncertainties remain in certain areas. Investors and stakeholders will be keenly watching how these elements unfold in the coming quarters.