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Edison Says Earnings Will Miss Forecasts

November 20, 2001|NIGEL HUNT | REUTERS

Edison International, parent of financially troubled utility Southern California Edison, said Monday that earnings for 2001 and next year will miss Wall Street forecasts.

Edison executives said in an investor conference call that the company expects operating earnings of $1.27 to $1.30 a share for the year, well below the $1.63 average estimate of analysts polled by Thomson Financial/First Call. For 2002, Edison said it expects profit of $1.50 to $1.60 a share, compared with analysts' average forecast of $1.84.

"Growth will not be front and center here in 2002. It is going to be repairing the balance sheet and restoring our credit-worthiness," Chief Financial Officer Ted Craver said.

SCE, Califonia's second-largest utility, recently reached a settlement with state regulators designed to allow the utility to recover $3.3 billion of its debts and to rescue it from bankruptcy.

SCE's credit ratings sank to junk status this year after it ran up debts it has estimated at $6.35 billion as it bought power for its customers. The Rosemead-based company was not allowed to pass on those costs fully due to a retail price freeze imposed under California's power deregulation.

Craver told investors the company has set a target of returning to investment-grade ratings by the end of next year, although he noted there were "many significant risks and issues yet to be resolved."

Edison International shares fell 25 cents to close at $14.60 a share on the New York Stock Exchange on Monday.

Craver said the 2001 estimate comprised earnings of $1.18 a share from SCE, 26 cents a share from another unit, Edison Capital and 34 to 37 cents a share from Edison Mission Energy. These earnings were partially offset by losses of 14 cents a share at Mission Energy Holding Co. and 37 cents a share combined for the parent and Edison Enterprises.

Craver noted that year-to-year comparisons were difficult to make.

Among one-time items excluded were an after-tax write-down of $1.15 billion, or $3.54 a share, that the company took in the third quarter related to an agreement to sell two coal-fired power plants in Britain.

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