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Edison's Stock Gets a Lift From Solid Third Quarter

October 24, 2000|From Reuters

Stock of Edison International rose 4% Monday after the parent of Southern California Edison posted stronger-than-expected third-quarter earnings.

Solid results from its independent power producer unit, Edison Mission Energy, contributed to a strong quarter.

Edison International's shares rose 88 cents to close at $22.25 on the New York Stock Exchange.

The Rosemead-based company said that during the quarter the costs of purchasing power exceeded revenue by more than $1.25 billion, upping its year-to-date under-collections of $2.358 billion.

"While the accountants have allowed this to stay off the income statement, SCE must absorb the cash hit. This was a concern all summer but really hit the stock when press reports warned of potential 'insolvency,' " Merrill Lynch analyst Steven Fleishman said.

The costs cannot currently be passed on under the terms of the state's deregulation of the power industry and the utility is continuing to try to recover them through various means including filings with California regulators.

Edison reported late Friday that it earned $360.1 million, or $1.11 a share, up from $255.3 million, or 74 cents, a year ago.

Earnings excluding a one-time adjustment in connection with terminating a phantom stock option plan were $1 a share, which exceeded some analysts' estimates of 83 cents.

Strong results for Edison Mission Energy were mainly due to improved results from its plants in the Midwest and Britain. Last year, it acquired a fleet of fossil-fueled plants in Illinois for about $4.8 billion from Chicago-based utility Commonwealth Edison (ComEd), a unit of Unicom Corp .

Edison International noted that the quarter's results did not reflect under-collected power purchase costs at its Southern California Edison subsidiary.

At a Glance

Other Southern California company earnings, excluding one-time gains and charges unless noted:

* Independent video game developer Activision Inc. of Santa Monica upped its projections for full-year earnings and reported second-quarter earnings that topped analyst expectations. Chief Executive Robert Kotick said the company raised its full-year earnings per share estimates to 63 cents, up 7 cents a share. He cited the company's strong performance in the first half of the year. The company reported net income for the quarter of $4.3 million, or 17 cents per share, compared with year-ago net income of $1.06 million, or 4 cents. Analysts had estimated EPS of 9 cents. Revenue rose to $144.4 million from $115.4 million.

* California Pizza Kitchen Inc., the Los Angeles-based restaurant operator, reported improved third-quarter net income of $2.6 million, or 17 cents per share, compared with $475,000, or 4 cents, a year earlier. Revenue rose to $55 million from $47 million. Same-store sales rose 9%. California Pizza Kitchen went public in the second quarter.

* Santa Barbara-based medical device maker Mentor Corp. reported fiscal second-quarter net income from continuing operations of $6 million, or 25 cents a share, compared with $6 million, or 24 cents, a year ago. Revenue rose to $60.3 million from $58 million.

* Ryland Group Inc., a Calabasas-based home builder, reported third-quarter net income of $22.8 million, or $1.67 per share, compared with $18.1 million, or $1.21, a year ago. Revenue rose to $628.3 million from $507.2 million.

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