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Edison’s Profit Rises 49% on Asset Sales

Times Staff Writer

Asset sales lifted third-quarter profit by 49% at Edison International, offsetting lower earnings at its Southern California Edison unit, the state’s second-largest utility.

Rosemead-based Edison on Friday reported net income of $813 million, or $2.46 a share, for the three months ended Sept. 30, up from $544 million, or $1.65 a share, for the same period last year. Sales fell to $3.19 billion in the quarter, down 6.8% from the year-earlier period.

Excluding proceeds from asset sales, tax benefits, earnings from operations slated for sale and other special items, Edison posted third-quarter earnings of 95 cents a share, down from $1.40 a year earlier. The operating results matched the average per-share estimate of analysts polled by Thomson First Call.

The company’s stock initially rose to $31.39 a share -- its highest level since before the California electricity crisis in 2000 and 2001 -- but later pulled back and ended down 18 cents to $30.82 on the New York Stock Exchange.

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“It wasn’t a bad quarter, but if they have a strategy besides selling off international assets, they haven’t articulated it yet,” said Ivan Feinseth, an analyst at Matrix USA in New York who rates Edison shares as “hold” and doesn’t own any. “They still have some issues to deal with at home.”

Edison, saddled with debt after struggling through the energy market meltdown, has been selling off international operations that are part of Edison Mission Energy. The unit is an unregulated subsidiary that owns power plants and sells electricity on wholesale markets.

Last month, the company sold Mission Energy’s stake in New Zealand’s Contact Energy to Origin Energy New Zealand for about $1.1 billion in cash and debt. That deal added a net gain of 39 cents a share to the third-quarter results.

A deal to sell 13 overseas Mission Energy plants for $2.3 billion to a partnership of International Power and Mitsui & Co. is pending.

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In a conference call with analysts, Edison Chief Executive John Bryson said the asset sales, along with rate increases recently approved by California regulators, “mark the transition in the company from a period of recovery to a period of what we believe will be substantial growth and high performance in the future.”

Encouraged by those developments, Edison in October boosted its projected operating profit for 2004 to $1.69 to $1.79 a share. Bryson left that guidance unchanged Friday.

Third-quarter profit at Edison’s regulated utility, SoCal Edison, totaled $259 million, down 21% from a year earlier. The net income of 79 cents a share included a one-time gain of 15 cents on special items, as well as improved results stemming from a rate increase.

Among the special items was a 5-cent-a-share charge to reflect the return of safety bonuses approved by the California Public Utilities Commission.

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Last month, SoCal Edison said it inadvertently used flawed safety data to win $35 million in collected and pending bonuses for safety performance over a seven-year period.

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Bloomberg News was used in compiling this report.


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