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Q3 Earnings Preview for Edison International (NYSE:EIX)

in EARNINGS/INVESTING IDEAS by

Edison International (NYSE:EIX) is scheduled to report Q3 earnings results on October 27, 2020.

The company is expected to report earnings of $1.49/share on revenue of $4.015 billion. The consensus earnings per share (EPS) of $1.49/share is based on a poll of 10 analysts and represents a decline in eps of −0.7% over the same quarter last year, when the company reported earnings of $1.50/share.

The revenue forecast of $4.015 billion based on a poll of 3 analysts implies a year-over-year (YoY) growth in revenue of 7.3%. Last year the company reported $3.741 billion in revenue for the quarter.

Expected to report EPS contraction of −0.7% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $4,014.64 $3,741.00 7.3%
EPS $1.49 $1.50 −0.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 2 out of the last 8 tracked quarters, and missed expectations 6 quarters.

What are your expectations from Edison International for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.12 $1 −11.0% Missed
Q1, 2020 $0.79 $0.63 −20.4% Missed
Q4, 2019 $1.03 $0.99 −4.0% Missed
Q3, 2019 $1.59 $1.50 −5.5% Missed
Q2, 2019 $1.12 $1.58 40.5% Beat
Q1, 2019 $0.89 $0.63 −28.9% Missed
Q4, 2018 $0.96 $0.94 −2.5% Missed
Q3, 2018 $1.33 $1.56 17.6% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 1.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $53.16 $53.78 1.2% Increase
April 30, 2020 $60.37 $55.69 −7.8% Decline
February 27, 2020 $74.31 $67.19 −9.6% Decline
October 29, 2019 $64.56 $62.16 −3.7% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of 4.20, the model suggests that the company is likely an earnings manipulator. A value of 4.20 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Edison International is currently trading at $59.75/share, up 2.6% for the day. The company is trading at approximately 75.7% of its 52-week high of $78.93/share. The company’s stock price is up 11.1% since the last earnings report and up 6.2% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 77.16 suggests the company is trading in technically overbought territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:EIX Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 20.27 and a forward P/E multiple of 13.19.

Edison International’s current share price also implies a price-to-book (P/B) multiple of 1.59. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $59.75
P/E Ratio 20.3x
P/E Ratio (Fwd) 13.2x
PEG Ratio 0.0
Total Debt / Total Capital 46.9%
Levered Free Cash Flow -$5.436 billion
EV / EBITDA 10.8x

Finbox

Edison International is a large-cap stock with a market capitalization of $22.599 billion and a total enterprise value of $45.682 billion. The company operates in the Utilities sector and the Electric Utilities industry.

Edison International, through its subsidiaries, engages in the generation, transmission, and distribution of electricity in the United States. The company generates electricity through hydroelectric, diesel/liquid petroleum gas, natural gas, nuclear, and photovoltaic sources. It supplies electricity primarily to residential, commercial, industrial, agricultural, and other customers, as well as public authorities through transmission and distribution networks. The company’s transmission facilities consist of lines ranging from 33 kV to 500 kV and substations; and distribution system comprises approximately 53,000 line miles of overhead lines, 38,000 line miles of underground lines, and 800 substations located in California. It serves approximately 5 million customers. The company was founded in 1886 and is based in Rosemead, California.

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