EIX

Edison International is the holding company for Southern California Edison, a regulated investor-owned utility serving a 50,000-square-mile California territory. The headline FY2025 results look spectacular at first glance — revenue up 9.8% to $19.3B, net income up 247% to $4.46B, diluted EPS of $11.55, and a 25.4% ROE — putting the stock at a remarkable 6.2x P/E. But the MD&A makes clear this is misleading: of the $4.46B in net income, roughly $1.94B is non-core items, driven by $2.96B of net earnings tied to the TKM and Woolsey wildfire settlement cost recoveries authorized through CPUC rates. Management's own core earnings figure is $2,520M (up from $1,900M), implying core EPS closer to $6.55 and a much more normal utility multiple near 11x. The genuine operating story is solid but unremarkable: core SCE earnings rose $679M on higher revenue from the 2025 General Rate Case decision and lower interest expense — classic rate-base-driven utility growth.

The balance sheet carries the heavy capital intensity typical of a utility in a major grid-hardening cycle: total liabilities of $74.8B against $17.6B of equity (4.25x leverage), $36.1B of long-term debt, and only $158M of cash. Capex of $6.51B exceeds operating cash flow of $5.80B, so the build-out is funded with external capital, and the company paid $1.27B in dividends — sustainable from core earnings but leaving the firm dependent on continued regulatory rate recovery and debt access. Current liabilities ($10.5B) exceed current assets ($7.69B), a negative working-capital position that is normal for utilities but worth noting given thin cash.