Edison Swings to Profit From Year-Ago Loss
Edison International, near bankruptcy a year ago because its Southern California Edison utility couldn’t pass high electricity costs on to customers, Friday reported first-quarter net income of $84 million.
The company earned 26 cents a share, contrasted with a net loss of $617 million, or $1.89 a share, in the year-earlier period. Analysts on average had expected earnings of 20 cents a share, according to Thomson Financial/First Call.
It was the second consecutive quarter of black ink for Rosemead-based Edison International after four quarters of losses. Results for the first quarter of last year included an after-tax charge of $661 million, or $2.03 a share, for electricity debts that Edison then considered unlikely to be recovered through customer rates.
Edison International posted sharply higher results for the latest quarter at its Southern California Edison utility, offset slightly by a wider loss at Edison Mission Energy, which builds and operates power plants around the world.
“I’m pleased to report that we are off to a good start this year,” Edison Chief Executive John E. Bryson told analysts and investors in a conference call. “For 2002, our focus is very clear. It is on rebuilding and strengthening both our balance sheet and our credit-worthiness.”
Edison International shares rose 16 cents to $18.41 on the New York Stock Exchange.
The company said it expects to earn more money this year than it previously predicted and is making progress in recovering from the state’s prolonged energy crisis.
Edison’s renewed health comes because, after two rate increases last year and a plunge in electricity prices, the utility collects more money from its 4.3 million customers than is needed to serve them through Edison’s own power plants and contracts and from power purchased for Edison by the state.
As part of a lawsuit settlement with the California Public Utilities Commission, Edison is allowed to take that difference--known as “headroom”--and apply it to a special regulatory account to recover past power procurement costs.
In early March, Southern California Edison secured $1.8 billion in financing, which allowed it to repay most of its $5.5 billion in electricity-related debts and other defaults. Edison was able to use $500 million of headroom in the first quarter to pay down its debts. It expects to have recovered all costs by the end of next year.
“They’re moving ahead now and putting the past behind them,” said Douglas Christopher, an analyst with Crowell, Weedon & Co.
Edison Chief Financial Officer Ted Craver said the company expects to earn at least $1.60 a share for the year, an increase from its last earnings guidance, which projected $1.50 to $1.60.
Craver cited the improved outlook for Southern California Edison, which earned $146 million, or 45 cents a share, in the first quarter, up from $63 million, or 19 cents, a year earlier. Last year’s quarter was hurt by a prolonged outage at one unit of the San Onofre nuclear power plant as well as higher interest expenses.
Edison Mission Energy posted a loss of $36 million, or 11 cents a share, because of lower power prices and an outage at a Pittsburgh power plant. In the first quarter last year, it recorded a loss of $11 million, or 3 cents a share.
