On July 25, 2024, Edison International (EIX, Financial) released its 8-K filing reporting second-quarter 2024 results. Edison International, the parent company of Southern California Edison, an electric utility serving 5 million customers in Southern California, announced a net income of $439 million, or $1.14 per share, surpassing the analyst estimate of $1.03 per share. The company also reported revenues of $4,336 million, exceeding the estimated $4,097.06 million.
Company Overview
Edison International is a major electric utility holding company based in Rosemead, California. It operates through Southern California Edison, which distributes electricity across a 50,000-square-mile area in Southern California, excluding Los Angeles. Edison Energy, another subsidiary, focuses on nonutility energy-related products and services.
Performance and Challenges
For the second quarter of 2024, Edison International reported a net income of $439 million, or $1.14 per share, compared to $354 million, or $0.92 per share, in the same period last year. Core earnings were $475 million, or $1.23 per share, up from $388 million, or $1.01 per share, in the previous year. The increase in core earnings was primarily driven by higher revenue authorized in Track 4 of SCE’s 2021 General Rate Case, an increase in the authorized rate of return, and recognition of previously unrecognized return on rate base related to wildfire restoration efforts. However, these gains were partially offset by higher interest expenses.
Financial Achievements
Edison International's financial achievements are significant for the regulated utilities industry, which relies heavily on authorized rates of return and regulatory approvals for revenue. The company's reaffirmation of its 2024 core EPS guidance of $4.75 to $5.05 underscores its confidence in sustained financial performance. The ongoing investments in SCE’s grid are crucial for meeting the projected 35% higher load growth over the next decade, ensuring a reliable and resilient electric system.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Operating Revenue | $4,336 million | $3,964 million | $372 million |
| Net Income | $439 million | $354 million | $85 million |
| Basic EPS | $1.14 | $0.92 | $0.22 |
| Core EPS | $1.23 | $1.01 | $0.22 |
Balance Sheet and Cash Flow
Key metrics from the balance sheet and cash flow statements indicate a robust financial position. The company’s operating income for Q2 2024 was $900 million, up from $724 million in Q2 2023. Despite higher interest expenses, the overall financial health remains strong, supported by strategic investments and regulatory approvals.
Commentary and Future Outlook
"With a strong start to the first half of the year, we are confident in reaffirming our 2024 core EPS guidance of $4.75 to $5.05," said Pedro J. Pizarro, president and CEO of Edison International. "Based on the progress in SCE’s 2025 General Rate Case, including many partial settlements, we are also confident in getting a strong outcome for customers."
The company’s strategic focus on expanding its electric system to accommodate significant load growth is expected to drive continued rate base growth and financial performance.
Share Repurchase Program
On June 26, 2024, Edison International's Board of Directors authorized a stock repurchase program for up to $200 million of its common stock, effective from July 29, 2024, until December 31, 2025. This program aims to offset dilution from common stock issued under the company’s long-term incentive compensation programs.
Conclusion
Edison International's strong Q2 2024 performance, driven by higher authorized revenues and strategic investments, positions the company well for future growth. The reaffirmation of its 2024 earnings guidance and the initiation of a share repurchase program further underscore its commitment to delivering value to shareholders.
Explore the complete 8-K earnings release (here) from Edison International for further details.
