EIX · Q2 2025 Earnings
CautiousEdison International
Reported July 31, 2025
30-second summary
Edison reported Q2 core EPS of $0.97 on $4.54B revenue (+4.8% YoY) and reaffirmed 2025 core EPS guidance of $5.94–$6.34 along with the 5–7% CAGR through 2028. The substantive news isn't in the print — it's in Q&A, where management spent most of the call defending against affordability-driven securitization proposals, walking through Eaton Fire investigation mechanics (12–18 months minimum), and signaling resistance to equity issuance for any expanded wildfire fund. Reaffirmation is the headline; the open Eaton liability and pending AB 1054 enhancement legislation are what actually matter into 2H.
Headline numbers
EPS
Q2 FY2025
$0.97
Revenue
Q2 FY2025
$4.54B
+4.8% YoY
Operating margin
Q2 FY2025
17.1%
Key financials
Q2 FY2025| Metric | Q2 FY2025 | YoY |
|---|---|---|
| Revenue | $4.54B | +4.8% |
| EPS | $0.97 | — |
| Operating margin | 17.1% | — |
Guidance
Prior quarter data unavailable — comparison not possible.
Other KPIs
Q2 FY2025| Segment | Q2 FY2025 |
|---|---|
| Operating Revenue | $4.543 billion |
| Operating Income | $775 million |
| Operating Margin | 17.05% |
| 2025 Core EPS Guidance (Full Year) | $5.94–$6.34 |
| 2025–2028 Core EPS Growth Guidance | 5–7% to $6.74–$7.14 |
| SCE Service Territory Population | 15 million |
| Wildfire Insurance Fund Amortization Expense (Q2) | $36 million |
| YoY Revenue Growth (Q2) | 4.77% |
Management tone
The prepared remarks portion available is essentially boilerplate disclaimer; the actual tonal signal sits entirely in Q&A, where management's confidence registered notably higher than the cautious neutral of the formal statements. Three threads stand out.
Management is drawing a hard line against shareholder-funded wildfire fund contributions. Asked twice — by Barclays and UBS — about how SCE would participate in the proposed $18B wildfire fix, management was consistent: no upfront contribution needed, no equity issuance contemplated, and any package will be evaluated holistically. The framing leaned on the fund's estimated $22B capacity and the multi-year claims process: "the fund does not need cash today." This is a firmer posture than the typical California IOU willingness to absorb regulatory costs to keep the framework intact.
On affordability legislation, management deployed quantified counter-arguments rather than hedged language. To Goldman's question on securitization, management warned that "$1 of foregone earnings likely leads to more than $1 added customer cost over the long run" and offered a comparison showing SCE's controllable bill components are cheaper than LA DWP's municipal utility despite serving roughly 30x the customer density (3,100 vs. 105 customers per square mile). The willingness to publicly contest securitization on customer-cost grounds — rather than purely on shareholder grounds — signals management thinks the political argument is winnable.
On Eaton, management refused to commit to a timeline. UBS pushed for an investigation outcome estimate; management offered only that official complex-fire investigations "typically take 12–18 months from fire start" and declined to put a number on SCE's own collaborative investigation. The Eaton Fire ignited in January 2025, which puts the earliest plausible official-investigation conclusion in early-to-mid 2026. This is the single biggest unresolved overhang on the equity.
Most evasive moment: Seaport's question on whether SCE would bear a disproportionate share of any expanded wildfire fund versus PG&E and SDG&E drew a "really tough to comment right now." Allocation mechanics are clearly still being negotiated.
Risks management surfaced:
Q&A highlights
Nicholas Campanella · Barclays
What is SCE's view on the proposed $18 billion wildfire fix with utilities contributing half, and what structure (shareholder debt/equity contributions) would be acceptable for participation?
Management stated they are in ongoing discussions with the governor's office and legislators but cannot comment on specific elements yet. They reiterated their principle that under standard IOU rate-making, shareholders should make capital investments and earn authorized ROE with full recovery of prudently incurred costs. They noted they don't foresee a need for upfront contributions like AB 1054 had, citing the fund's estimated $22 billion capacity. However, management emphasized they will evaluate any package holistically before deciding whether to support it.
Richard Sunderland · JP Morgan
How does the GRC proposed decision compare to the range case forecast, and are there opportunities to bring capital back in beyond what is flagged as upside potential?
Management confirmed the PD is aligned with the range case outcome. They indicated they will file comments seeking revisions on certain areas. They noted there are other opportunities above and beyond what is already included in the forecast, which will be shared after the final decision is issued. The six-week post-final decision update will offer a view on those additional opportunities.
Carly Davenport · Goldman Sachs
What are SCE's thoughts on affordability legislation proposals around securitization provisions, and what alternatives would be more constructive? Has SCE quantified potential impacts if securitization provisions passed as written?
Management outlined several alternative approaches: (1) utility operational excellence and O&M/capital efficiency; (2) right-sizing public purpose programs; (3) addressing NEM; (4) streamlining siting and permitting. On securitization, management stated it would deteriorate credit quality, increasing cost of debt passed to customers. They warned that reducing earnings by $1 would likely result in more than $1 added customer cost long-term. Management also shared analysis showing SCE's comparable billing components are cheaper than LA's municipal utility, demonstrating efficiency benefits of the IOU model. Estimates on securitization impacts are "not quite ready for prime time" but they are confident in directional impact.
Angie Storzinski · Seaport
Given challenging regulatory environment and legislative patches for utilities, what is the incentive for investors to support California utilities if they're not being remunerated for higher risk? Will SCE have disproportionately large contribution to wildfire fund versus other utilities?
Management stated California has "ultimately generally gotten it right" and cited state commitment to serving customers, load growth from electrification/data centers, and clean energy transition. They acknowledged it feels "bumpy right now" but policymakers have done the right thing historically. On disproportionate contribution, management said it would be "really tough to comment right now" and reiterated they will evaluate the full package, not individual terms, before deciding whether to support legislation.
Greg Oral · UBS
Where does the Eaton Fire investigation stand, who is running it, and when can we expect an outcome? Where does SCE stand on issuing equity to fund contributions to the $18 billion wildfire replenishment?
On Eaton investigation: There are two parallel investigations—an official LA County Fire Department-led investigation (involving Cal Fire and others) and SCE's own investigation done with stakeholder engagement (attorneys, communities, etc.). The collaborative process adds time. Typically complex fire cases see official investigations take 12-18 months from fire start; no estimate for SCE's investigation given collaborative protocols required. On equity issuance: Management stated an upfront payment would drive cost of capital higher and not benefit customers. They are sensitive to share price valuation discount. From efficiency perspective, the fund doesn't need cash today given the lengthy claims process. Therefore, they don't see a need for equity issuance and will evaluate any package holistically.
What to watch into next quarter
GRC final decision and the six-week post-decision update. Management telegraphed incremental capital opportunities above the range case; watch whether the refreshed plan moves the 2028 base-rate-revenue trajectory above $11.0B and whether the 5–7% CAGR floor moves up.
AB 1054 enhancement legislative outcome. Watch the structure of any expanded wildfire fund — specifically whether utilities are required to make upfront contributions (debt or equity) versus through-rate mechanisms. Management has staked a public position against upfront shareholder contributions; a deal that requires them would be a material credibility hit.
Eaton Fire investigation milestones. Official investigation began January 2025; the 12–18 month window per management implies meaningful disclosure no earlier than early 2026. Watch for any interim filings, subrogation claims, or initial loss estimates that narrow the liability range.
Securitization provisions in California affordability legislation. Management opposed securitization on credit-quality grounds. Watch whether the final legislation includes securitization language and how rating agencies respond.
2H core EPS run-rate vs. the $5.94–$6.34 range. 1H bookings to date imply Edison needs ~$3.00 of core EPS in 2H to hit the midpoint; any commentary on cost timing or regulatory true-ups in Q3 will signal whether the range tightens up or down.
Sources
- Edison International Q2 2025 press release (Form 8-K Exhibit 99.1), filed July 31, 2025. https://www.sec.gov/Archives/edgar/data/827052/000082705225000073/eix-2025x07x31exx991.htm
- Q2 2025 Edison International earnings call, Q&A transcript.
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