Edison’s Quarterly Profit Up

Edison International said Friday that its fourth-quarter profit nearly doubled from a year earlier on gains from selling overseas power plants and from resolving various regulatory and tax issues.

The Rosemead-based parent of Southern California Edison said net income in the quarter ended Dec. 31 rose to $379 million, or $1.15 a share, from $197 million, or 60 cents, a year earlier. Its revenue rose 4% to $2.33 billion from $2.24 billion.

Excluding all the one-time gains and charges, Edison said “core earnings” from running its basic business equaled 42 cents a share. That was down 19% from 52 cents a year earlier but well above the 22 cents that Wall Street expected, according to analysts surveyed by Thomson First Call.

During the state’s 2000-01 energy crisis, Edison came perilously close to bankruptcy after amassing billions of dollars in debt from buying electricity at soaring prices for its customers.

The utility has since moved to shed its foreign power plants to raise cash, pay down its debts and focus on its two major remaining lines: Southern California Edison and Edison Mission Energy, which operates independent domestic power plants, most of them outside of California. Edison has sold 13 of its 14 international power facilities in the last 15 months.

Those actions caused Standard & Poor’s last month to upgrade Edison’s debt ratings, and Edison in November hiked its quarterly dividend to 25 cents a share from 20 cents.

Edison’s core earnings topped analysts’ forecasts partly because of “better-than-expected results at Mission Energy, and I assume that’s based on their getting better prices in the market” for electricity, said Paul Fremont, an analyst with Jefferies & Co. in New York.

Another factor: Higher rates for Southern California Edison’s 4.6 million commercial and residential customers, who are spread over a 50,000-square-mile region in coastal, Central and Southern California, Fremont said.

In July, the state Public Utilities Commission approved an estimated 3% increase in customer rates to cover the utility’s higher expenses and costs related to the upgrade and expansion of its electricity grid. Southern California Edison accounts for 83% of Edison’s overall revenue.

Southern California Edison’s fourth-quarter earnings jumped 42% to $315 million from $222 million a year earlier. But for all of 2004, its profit slipped 1% to $915 million from $922 million.

Edison Chief Executive John Bryson said the utility last year spent $1.9 billion to upgrade and expand its distribution, transmission and generation facilities, up from $1.1 billion spent in 2003.

It’s a “big, big investment that we’re making in the basic infrastructure of our utility business,” Bryson said in a conference call with analysts. “California needs this investment.”

Parts of Southern California could endure blackouts this summer if the region suffers from unusually hot weather, because power supplies might not be ample enough, state energy officials said last month.

For all of 2004, Edison International’s net income rose 12% to $916 million, or $2.78 a share, from $821 million, or $2.50, the previous year.

Excluding the asset sales and other one-time gains and charges, Edison’s full-year profit equaled $1.91 a share, down 14% from $2.22 a share in 2003, the company said. Its annual revenue fell 5% to $10.2 billion from $10.7 billion.

Edison’s stock fell 33 cents to $33.57 a share Friday on the New York Stock Exchange. But the stock has jumped 47% in the last year.