A month has gone by since the last earnings report for Edison International (EIX). Shares have lost about 2.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Edison International due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Edison International's Q1 Earnings Miss, Revenues Beat
Edison International reported first-quarter 2019 adjusted earnings of 63 cents per share, which missed the Zacks Consensus Estimate of 88 cents by 28.4%. The bottom line also decreased 21.3% from 80 cents registered in the year-ago quarter.
Excluding adjustments, quarterly earnings came in at 85 cents per share from continuing operations compared with 67 cents in first-quarter 2018.
Edison International's first-quarter revenues came in at $2.82 billion, surpassing the Zacks Consensus Estimate of $2.65 billion by 6.6%. Moreover, the top line increased 10.1% from the year-ago quarter’s $2.56 billion.
In the reported quarter, total operating expenses increased 10.7% year over year, to $2,472 million. Operation and maintenance costs increased 30.7% year over year, whereas purchased power and fuel costs rose 8.5%. Depreciation and amortization expenses also increased 3.9%.
Edison International registered an operating income of $352 million in the first quarter compared to with the $330-million operating income registered in the year-ago quarter.
Interest expenses were $194 million, higher than $170 million recorded in the prior-year quarter.
Southern California Edison’s (SCE) first-quarter earnings were 90 cents per share compared with 88 cents a year ago. The upside resulted from the income tax benefits related to changes in the allocation of deferred tax re-measurement between customers and shareholders as a result of a CPUC resolution issued in February 2019.
The Parent and Other segment incurred a loss of 5 cents per share in the quarter under review compared with the year-ago quarter’s loss of 21 cents. The decrease in core losses was mainly due to lower corporate expenses and decreased losses at the competitive businesses under Edison Energy Group.
As of Mar 31, 2019, cash and cash equivalents were $328 million compared with $144 million as of Dec 31, 2018. Long-term debt amounted to $15.68 billion, higher than the 2018-end level of $14.63 billion.
Net cash from operating activities during the first three months of 2019 was $210 million compared with $859 million in the prior year quarter. Total capital expenditures summed $1,074 million at the end of the first quarter, down from $1,137 million a year ago.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
Currently, Edison International has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Edison International has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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