Nov-06-2009Edison third-quarter profit falls on lower power prices
(topic overview)
CONTENTS:- Profit at the company's Southern California Edison rose, but was more than offset by lower earnings at Edison Mission Group, where earnings from coal- and gas-fired projects dropped as a result of lower energy prices and from lower trading income. (More...)
- Edison International's (EIX) third-quarter profit fell a less-than-expected 8.2% as earnings were hurt by a decline in revenue amid lower energy prices. (More...)
- Net income fell to $403 million, or $1.23 a share, from $439 million, or $1.33, a year earlier, the Rosemead, California-based company said today in a statement. (More...)
- SCE estimates capital costs of $1.2 billion over the period 2009 2012. (More...)
- Spot energy prices affecting the Illinois Plants were adversely impacted, particularly during some off-peak periods, by congestion affecting the Northern Illinois control area. (More...)
- The utility supplies electricity to 4.9 million homes and businesses in Southern California. (More...)
SOURCESFIND OUT MORE ON THIS SUBJECTProfit at the company's Southern California Edison rose, but was more than offset by lower earnings at Edison Mission Group, where earnings from coal- and gas-fired projects dropped as a result of lower energy prices and from lower trading income. The company also narrowed its 2009 earnings guidance range to $2.23 to $2.43 per share, compared with a previous estimate of $2.18 to $2.48 per share.
[1] Edison rose 7 cents, or 0.2 percent, to $32.25 at 9:44 a.m. in New York Stock Exchange composite trading. The shares are little changed this year. Profit at the Edison Mission power generation unit plunged 71 percent to $61 million as lower energy prices depressed income at its coal and gas-fired plants and trading profits fell.
[2] EMG's earnings (loss) from continuing operations were $61 million and $(445) million for the three- and nine-month periods ended September 30, 2009, respectively, compared to $208 million and $479 million for the respective periods in 2008. The quarter and year-to-date variances reflect lower income at its coal- and gas-fired projects driven by lower energy prices and lower trading income.
[3] Edison International (parent) and other earnings (loss) from continuing operations were $(3) million and $34 million for the three- and nine-month periods ended September 30, 2009, respectively, compared to $(10) and $(22) million for the respective periods in 2008. The after-tax earnings for the nine months ended September 30, 2009 were primarily due to the impact of the Global Settlement resulting from lower combined state deferred income taxes recorded by Edison International and its subsidiaries under their respective tax allocation agreements (see " - Global Settlement" for further discussion).
[3] The year-to-date variance reflects the impact of the Global Settlement which resulted in after-tax earnings of $300 million in 2009 (see " - Global Settlement" for further discussion), a non-cash accounting benefit of $46 million, in the third quarter of 2009 related to the transfer of the Mountainview power plant to utility rate base, and a charge of $49 million in the third quarter of 2008 resulting from the CPUC performance-based ratemaking decision. Excluding these items, SCE's quarter and year-to-date earnings reflect higher operating income related to the 2009 GRC decision and lower nonoperating expenses, partially offset by higher income taxes.
[3] The quarter variance also reflects a charge recognized in 2008 related to hedge contracts with Lehman Brothers Commodity Services Inc. The year-to-date variance also reflects the impact of the Global Settlement (see " - Global Settlement" for further discussion), lower earnings at Edison Capital and the favorable buy-out of a coal contract at Midwest Generation in 2008.
[3] 
Edison International's (EIX) third-quarter profit fell a less-than-expected 8.2% as earnings were hurt by a decline in revenue amid lower energy prices. [4] ROSEMEAD, Calif. — California utility operator Edison International said Friday its third-quarter profit fell on lower earnings at its Edison Mission Group.
[1] Edison International, the owner of California's largest electric utility, said third-quarter profit declined 8.2 percent as the recession depressed power sales and prices at its Edison Mission generating unit.
[2] Edison International is one of the industry leaders in privatized deregulated and incentive-regulated markets and power generation. It is the parent company of Edison Mission Energy Southern California Edison Edison Capita Edison Enterprises and Edison O&M Services. (Company Press Release) Edison International has a market cap of $10.48 billion; its shares were traded at around $32.18 with a P/E ratio of 8.7 and P/S ratio of 0.7.
[3] Profit at Southern California Edison climbed 47 percent to $346 million on higher rates and lower expenses. The company's Southern California Edison utility won approval in March from the California Public Utilities Commission to increase its rate-base revenue this year by $495 million, or about 11 percent, to pay for investments in its power-distribution system.
[2] Excluding one-time items, profit was $1.09 a share, beating by 5 cents the average of 9 analyst estimates compiled by Bloomberg. Sales fell 15 percent to $3.7 billion as the recession and cooler-than-normal weather reduced electricity demand and lowered prices in the company's generation unit's service area in the Midwest.
[2] Power prices in PJM Interconnection, the biggest U.S. wholesale power market, dropped 58 percent to a third-quarter average of $40.25 per megawatt-hour, according to data compiled by Bloomberg. The company narrowed its 2009 adjusted profit forecast to $2.95 to $3.15 a share from a previous range of $2.90 to $3.20.
[2] Analysts polled by Thomson Reuters expected a profit of $1.04 per share on $3.76 billion in revenue.
[1] Analysts, on average, expect a profit of $3.02 per share for the year.
[1] Edison earned $403 million, or $1.23 per share, down from $439 million, or $1.33 per share, for the same quarter last year.
[1] Excluding regulatory items and discontinued operations, the company posted core earnings of $358 million, or $1.09 per share.
[1] SCE's earnings from continuing operations were $346 million and $1.1 billion for the three- and nine-month periods ended September 30, 2009, respectively, compared to $235 million and $542 million for the respective periods in 2008.
[3] SCE's 2009 2013 total capital investment plan includes capital spending in the range of $16.8 billion to $19.8 billion. The electrical load, calculated from published data by PJM, for these locations declined 7% and 4% during the nine months ended September 30, 2009, respectively, compared to the corresponding period of 2008.
[3] The average 24-hour PJM market price for energy at the Northern Illinois Hub and the PJM West Hub declined to $28.62/MWh and $38.65/MWh, respectively, during the nine months ended September 30, 2009 as compared to $52.68/MWh and $73.86/MWh, respectively, during the nine months ended September 30, 2008. As reflected in the net income summary below, these factors had an adverse impact on the results of operations during the third quarter and nine months ended September 30, 2009.
[3] Lower electrical load has also generally decreased congestion in the eastern power grid, thereby resulting in lower trading income in the third quarter and nine months ended September 30, 2009.
[3] Net income fell to $403 million, or $1.23 a share, from $439 million, or $1.33, a year earlier, the Rosemead, California-based company said today in a statement. [2] The company predicts income of $2.95 to $3.15 per share excluding items.
[1] SCE estimates capital costs of $1.2 billion over the period 2009 2012. Other capital investments consisting of $1.8 billion for transmission development and $10.1 billion for distribution projects to improve reliability and expand capability of its infrastructure over the period 2009 2013.
[3] Over the period 2009 2013, SCE expects to spend $464 million for the project.
[3] SCE requested 100% abandoned plant recovery, 100% CWIP recovery, and a 150 basis point ROE project adder. EdisonSmartConnect SCE's advanced metering project that will install "smart" meters in approximately 5.3 million households and small businesses throughout its service territory.
[3] San Onofre Steam Generator Replacement Project Recently, SCE took delivery of the first two of four steam generators which are expected to be placed in service in the fourth quarter of 2009. The project is intended to enable San Onofre to operate until the end of its initial license period in 2022, and beyond if license renewal proves feasible.
[3] Spot energy prices affecting the Illinois Plants were adversely impacted, particularly during some off-peak periods, by congestion affecting the Northern Illinois control area. [3] Edison had the most revenue from electricity sales in the state last year, according to filings. Edison Mission can generate about 10,000 megawatts of electricity, with about 73 percent of its capacity at coal- fueled plants in Illinois and Pennsylvania.
[2] Edison International had an annual average earning growth of 4.9% over the past 10 years.
[3] Edison International ( EIX ) filed Quarterly Report for the period ended 2009-09-30.
[3] The utility supplies electricity to 4.9 million homes and businesses in Southern California. [2] SOURCES1.
The Associated Press: Edison International 3rd-quarter profit falls2.
Edison third-quarter profit falls on lower power prices -- latimes.com3.
Edison International Reports Operating Results (10-Q) -- GuruFocus.com4.
Edison Intl 3rd-Quarter Profit Slides 8.2% On Energy Prices - WSJ.comGENERATE A MULTI-SOURCE SUMMARY ON ANY SUBJECTEnter your search query below. WAIT 10-20 sec for the new window to open.
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