Why Is Edison International (EIX) Up 9% Since Last Earnings Report?

A month has gone by since the last earnings report for Edison International (EIX). Shares have added about 9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Edison International due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Edison International Q4 Earnings Miss, Revenues Up Y/Y

Edison International reported fourth-quarter 2020 adjusted earnings of $1.19 per share, which missed the Zacks Consensus Estimate of $1.23 by 3.3%. The bottom line however improved 20.2% from the year-ago quarter’s earnings figure.

Excluding adjustments, the company recorded earnings of $1.39 per share from continuing operations compared with 40 cents generated in fourth-quarter 2019.

For 2020, the company recorded adjusted earnings of $4.52 per share, which came in lower than 2019’s $4.70. The full-year earnings also lagged the Zacks Consensus Estimate of $4.55.

Total Revenues

Edison International's fourth-quarter revenues totaled $3,157 million, which surpassed the Zacks Consensus Estimate of $3,078 million by 2.6%. Also, the top line rose 6.3% from the year-ago quarter’s $2,970 million.

For 2020, the company recorded revenues of $13.58 billion, which came in higher than 2019’s $12.35 billion. The full-year revenues also beat the Zacks Consensus Estimate of $13.47 billion.

Operational Highlights

In the reported quarter, total operating expenses dropped 11.9% year over year to $2,363 million.

Operation and maintenance costs declined 5.6% year over year, whereas expense associated with wildfire related claims plunged 90%. Meanwhile, purchased power and fuel costs rose 12.9%, whereas depreciation and amortization expenses increased 7.2%.

Operating income amounted to $794 million in the fourth quarter of 2020, compared with $287 million in the year-ago quarter.

Segment Results

Southern California Edison’s (SCE) fourth-quarter adjusted earnings were $1.30 per share compared with $1.08 a year ago.

The Parent and Other segment incurred an adjusted loss of 11 cents per share compared with the year-ago quarter’s loss of 9 cents.

Financial Update

As of Dec 31, 2020, Edison International's cash and cash equivalents amounted to $87 million compared with $68 million as of Dec 31, 2019.

Long-term debt was $19.63 billion, higher than the 2019-end level of $17.87 billion.

Net cash inflow from operating activities during 2020 was $1,263 million against cash outflow of $307 million in the prior-year.

Total capital expenditures totaled $5,484 million at the end of 2020, up from $4,877 million a year ago.

2021 Guidance

Edison International announced that it will provide 2021 earnings guidance after a final decision has been adopted by the CPUC on the Southern California Edison 2021 GRC

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions. The consensus estimate has shifted 20.27% due to these changes.

VGM Scores

Currently, Edison International has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Edison International has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

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