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01/11 03:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed outlook. Positive elements include above-guidance EPS, robust wildfire mitigation investments, and a strong dividend declaration. However, concerns arise from potential liabilities related to wildfires, increased interest expenses, and legislative uncertainties. The Q&A reveals management's cautious stance on liability estimations and fund access, adding to investor uncertainty. The absence of a share repurchase program and the lack of clarity on wildfire legislation further neutralize the sentiment. Overall, the mixed signals and uncertainties result in a neutral prediction for stock price movement.
Core Earnings Per Share (EPS) $1.37 (up from $1.13), driven by $0.30 associated with the TKM settlement approval, partially offset by higher interest expense.
Interest Expense Higher interest expense at EIX Parent and Other, contributing to the overall EPS impact.
Capital Expenditures $1,400,000,000 annual capital spending on wildfire mitigation, with an additional $1,100,000,000 requested for the next gen ERP application.
Rate Base $700,000,000 of rate base included in the 2025 guidance from the WMCE proceeding settlement.
Debt Issuance $550,000,000 of senior notes issued in March and $1,500,000,000 of long-term debt issued by SCE, both oversubscribed.
Wildfire Fund Access Potential access to the $21,000,000,000 wildfire fund for claims, with a first billion dollars from customer-funded self-insurance.
Wildfire Mitigation Plan: SCE plans to underground more than 150 circuit miles of distribution power lines in high fire risk areas, enhancing reliability and resilience against extreme weather.
General Rate Case (GRC): SCE's GRC request includes $1.4 billion of annual capital spending on wildfire mitigation and hardening an additional 1,800 miles of overhead distribution infrastructure.
Next Gen ERP Application: SCE filed for a total capital investment of $1.1 billion to provide substantial benefits to customers and enable business improvements.
Core EPS: Edison International reported core EPS of $1.37 for Q1 2025, up from $1.13 year-over-year.
Capital Expenditure: SCE continues to execute against a capital plan targeting key programs while maintaining flexibility for future adjustments.
Leadership Changes: Shonda Nwamu has joined as the new General Counsel, bringing expertise in California's legal and regulatory environments.
Legislative Engagement: Edison continues to engage with legislators to enhance California’s wildfire regulatory framework, focusing on safety and economic development.
Wildfire Liability: Edison International may incur material losses related to the Eaton fire, with ongoing investigations suggesting that their equipment could be associated with the ignition. The liability is currently not estimable, but it is probable that losses will be significant.
Regulatory Challenges: The company is navigating a complex regulatory environment, particularly with the California Public Utilities Commission (CPUC) regarding its 2025 general rate case, which has seen delays and could impact revenue recognition.
Wildfire Fund Access: While the company has access to a $21 billion wildfire fund for claims, the process for accessing these funds is contingent on ongoing investigations and potential settlements, which may take time.
Supply Chain Risks: Approximately 5% of total purchases are foreign materials, translating to about $125 million annually, which exposes the company to tariff risks and potential supply chain disruptions.
Legislative Uncertainty: There is uncertainty surrounding the potential for new wildfire legislation in California, which could impact financial stability and investor confidence.
Interest Expense: Increased interest expenses are affecting financial performance, which may impact future capital expenditures and overall financial health.
Wildfire Mitigation Plan: SCE's comprehensive plan to rebuild electrical distribution infrastructure includes undergrounding over 150 circuit miles in high fire risk areas, enhancing reliability and resilience.
General Rate Case (GRC): SCE's GRC request includes $1.4 billion of annual capital spending on wildfire mitigation and hardening an additional 1,800 miles of overhead distribution infrastructure.
Capital Expenditure Plans: SCE plans to file an application for its advanced metering infrastructure program to replace its smart meter fleet, addressing technology obsolescence.
Legislative Engagement: Edison continues to engage with legislators to support community safety and enhance California’s wildfire regulatory framework.
EPS Growth Guidance: Edison is confident in meeting its 2025 EPS guidance and delivering a 5% to 7% core EPS CAGR through 2028.
2025 EPS Guidance: Edison reaffirms its 2025 EPS range of $5.94 to $6.34, with long-term EPS growth expectations of 5% to 7% from 2025 to 2028.
Capital and Rate Base Projections: Edison will refresh its guidance six weeks after the GRC final decision, including updated capital and rate base projections.
Financing Plan: Edison plans to maintain a capital-efficient financing strategy, primarily debt-financed, with minimal equity through 2028.
Wildfire Fund Access: Edison expects to access the wildfire fund for claims after utilizing $1 billion of customer-funded self-insurance.
Shareholder Return Plan: Edison International is committed to delivering a core EPS growth of 5% to 7% from 2025 to 2028, translating to an EPS range of $6.74 to $7.14 by 2028.
Share Repurchase Program: Edison International has not explicitly mentioned a share repurchase program in this call.
Dividend Program: No specific dividend program was discussed during the call.
The earnings call summary and Q&A reveal mixed sentiments. While the company demonstrates confidence in achieving EPS growth and has plans for wildfire mitigation and capital allocation, uncertainties remain. The Q&A highlights unclear timelines for liability estimates and EPS growth beyond 2025. Despite positive elements like EV adoption driving growth and regulatory clarity, the lack of explicit guidance and potential financial charges balance out the positives, resulting in a neutral sentiment.
The earnings call summary presents a mixed outlook. While there are positive elements like strong long-term EPS growth guidance and proactive wildfire mitigation strategies, concerns arise from regulatory challenges and potential financial impacts of securitization and wildfire fund contributions. The Q&A section reveals management's cautious stance on regulatory issues and lack of clear answers on key risks, which tempers the overall sentiment. The absence of a market cap limits the ability to gauge stock reaction magnitude, but the balanced positives and negatives suggest a neutral stock price movement.
The earnings call presents a mixed outlook. Positive elements include above-guidance EPS, robust wildfire mitigation investments, and a strong dividend declaration. However, concerns arise from potential liabilities related to wildfires, increased interest expenses, and legislative uncertainties. The Q&A reveals management's cautious stance on liability estimations and fund access, adding to investor uncertainty. The absence of a share repurchase program and the lack of clarity on wildfire legislation further neutralize the sentiment. Overall, the mixed signals and uncertainties result in a neutral prediction for stock price movement.
The earnings call reveals potential material losses from the Eaton Fire, regulatory uncertainties, and significant capital expenditure risks. While financial metrics showed growth, the lack of a share repurchase program and unresolved liabilities from the fire weigh negatively. The Q&A further highlights management's cautious stance on liabilities and regulatory outcomes, adding to investor concerns. Despite optimistic EPS guidance, the uncertainty and potential financial implications from the fire and regulatory challenges suggest a negative stock price reaction.
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