Overview: Millennium Management's 1Q14 positions (Part 7 of 7)
Millennium Management and Edison International
Millennium Management has top new positions in Rice Energy Inc. (RICE) and Anixter International Inc. (AXE). Positions were increased in PPL Corp. (PPL), Devon Energy (DVN), Teva Pharmaceuticals (TEVA), and Edison International (EIX).
Millennium Management enhanced its position in Edison International (EIX) to 3,533,270 shares, which now accounts for 0.58% of the fund’s portfolio. Millennium earlier owned 480,714 shares in Edison that accounted for 0.07% of the portfolio in 4Q13.
Edison International is the parent holding company of Southern California Edison (SCE), an investor-owned public utility primarily engaged in the business of supplying and delivering electricity. Edison International is also the parent company of subsidiaries that are engaged in competitive businesses related to the generation or use of electricity. SCE serves a population of nearly 14 million via 4.9 million customer accounts in a 50,000-square-mile service area within central, coastal, and southern California.
Edison sees settlement of dispute over San Onofre plant
Shares went up in March on reports of a settlement between SCE and The Utility Reform Network (TURN), the Office of Ratepayer Advocates (ORA) of the California Public Utilities Commission (CPUC) and San Diego Gas & Electric Company (SDG&E). If approved, this would resolve the CPUC’s inquiry into the June, 2013, retirement of the San Onofre Nuclear Generating Station (SONGS). Last year, SCE, as the majority owner and operator of SONGS, announced it would permanently retire two reactors at the San Onofre plant after unusual wear was found on steam generator tubes. There was a dispute over who will bear losses. Reports on the settlement at the end of March noted that $286 million will be returned to SDG&E ratepayers and $1.1 billion will be returned to Southern California Edison ratepayers.
Bankruptcy court approves Edison Mission Energy’s sale to NRG
The company’s unit and power wholesaler Edison Mission Energy (EME), got court approval to exit Chapter 11 protection earlier in March via a sale to NRG Energy Inc. for around $2.6 billion. According to a report on Bloomberg, the liability free settlement gave Edison International a net benefit of $200 million. EME had filed for bankruptcy at the end of 2012 and a statement back then said, “Like other independent power generators, EME, whose is the parent of Chicago-based Midwest Generation, has been challenged by depressed energy and capacity prices and high fuel costs affecting its coal-fired facilities, combined with pending debt maturities and the need to retrofit its coal-fired facilities to comply with environmental regulations.” NRG said with the transaction, the company and its affiliates will become the third largest U.S.-based renewable energy generator within the U.S. with over 2,900 net megawatts of wind and solar capacity in operation or under construction.
First quarter results beat estimates
Edison’s 1Q results beat estimates. Core earnings were $294 million, or $0.90 per share, compared to $252 million, or $0.77 per share, in the 1Q13. Revenues increased 11.2% year-over-year (or YoY) to $2,926 million. 1Q14 adjusted earnings exclude non-core charges of $96 million, or $0.29 per share, related to SCE’s settlement agreement for San Onofre and $22 million, or $0.07 per share, of non-core losses from discontinued operations.
The company reaffirmed its 2014 core earnings guidance of $3.60 to $3.80 per share. Edison’s management added, “we have significantly reduced uncertainties through the resolution of the Edison Mission Energy bankruptcy and pending settlement of the cost recovery associated with the San Onofre Nuclear Generation Station.”
Browse this series on Market Realist:
- Part 1 - Must-know: Millennium Management discloses 1Q14 positions
- Part 2 - Why Millennium Management starts new position in Rice Energy
- Part 3 - Millennium Management adds new position in Anixter International
- Utility Industry
- Edison International
- Southern California Edison
- Edison Mission Energy