Edison Profit Soars in Quarter

Edison International on Monday said its first-quarter profit more than doubled from a year earlier, spurred by a rate hike at Southern California Edison Co., higher prices at Edison’s independent power unit and overseas investment gains.

Edison’s stock jumped to a record high in response, gaining $1.31 a share, or 3.6%, to $37.80 on the New York Stock Exchange.

The stock has now more than quadrupled since the fall of 2002, when it traded for less than $8 a share in the aftermath of the California 2000-01 energy crisis. Edison’s total stock market value is now $12.5 billion.

The Rosemead-based company reported net income in the quarter ended March 31 of $201 million, or 61 cents a share, up from $97 million, or 30 cents, a year earlier. Revenue climbed 16% to $2.45 billion.

The earnings easily beat Wall Street’s forecast of 34 cents a share, based on analysts surveyed by Thomson First Call.

The improved results extended Edison’s recovery from its near brush with bankruptcy during the energy crisis, when Edison was forced to borrow billions of dollars to buy electricity at soaring prices for its customers.

Since then, the utility has divested its foreign power plants, reduced its debt burden and focused on Southern California Edison and its Mission Energy unit, which operates independent domestic power plants.

Higher electricity prices in Mission Energy’s key markets of Illinois and Pennsylvania contributed to the higher earnings. The division’s results “marked a considerable contrast to the performance a year ago,” Edison Chief Executive John Bryson said in a conference call with analysts.

Mission Energy posted first-quarter earnings of $25 million, contrasted with a year-earlier loss of $39 million. Its revenue rose 31% to $511 million from $389 million.

“Mission Energy is certainly on the rebound,” said Paul Patterson, an analyst with Glenrock Associates in New York.

Edison executives said the strong results at Mission Energy would help the parent company beat the full-year profit forecast of $2.14 a share it put out in October.

A new profit forecast will be issued later this year, the company said.

Southern California Edison -- which serves 4.6 million customers in a 50,000-square-mile region in Central and Southern California -- also improved with the help of a rate increase from California regulators.

The state Public Utilities Commission last July approved an estimated 3% increase in rates for Southern California Edison’s customers. The rate hike was retroactive to May 2003.

Southern California Edison’s first-quarter profit rose 31% to $131 million from $100 million a year earlier.

Its revenue -- which accounted for 78% of Edison International’s overall business -- increased 12% to $1.91 billion from $1.70 billion.

Southern California Edison said retail and wholesale electricity sales increased by 7.2% on a volume basis in the quarter.

The utility has asked regulators to approve construction of a new electricity transmission line to help it meet growing demand.

Edison also has a financial-services arm, Edison Capital, and its gains in the first quarter also were a key reason Edison’s results far surpassed expectations, analyst Brooke Glenn Mullin of J.P. Morgan Securities said in a note to clients.

Thanks to gains on several investments in telecommunications companies in Eastern Europe, Edison Capital’s profit in the quarter jumped 41% to $52 million from $11 million.

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Bloomberg News was used in compiling this report.