01—Abstract
Summary
Summary of the 10-Q filed October 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Edison International (EIX) and its subsidiary Southern California Edison (SCE) reported mixed financial results for the third quarter and the first nine months of 2026 compared to the prior year.
While core earnings for SCE showed a slight increase year-over-year for the nine-month period, net income for both Edison International and SCE declined significantly over the same period, primarily driven by a substantial decrease in non-core benefits from wildfire claims and expenses in 2025 compared to 2026. Wildfire-related liabilities and ongoing investigations remain a key focus. The company has recorded significant losses related to the Eaton Fire, with further material losses probable.
While SCE has secured substantial expected recoveries from the Wildfire Fund and through customer rates for past events, the ongoing uncertainty surrounding future wildfire costs and regulatory recovery mechanisms continues to be a material risk factor. The company's capital expenditures remain substantial, focused on infrastructure improvements and wildfire mitigation efforts.
02—Key points
Key Highlights
- Net income for Edison International decreased by $822 million for the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to a significant reduction in non-core benefits from wildfire claims and expenses.
- SCE's core earnings increased by $41 million for the nine months ended September 30, 2026, compared to the prior year, driven by higher revenues from the 2025 GRC final decision's escalation mechanism.
- The company has recorded $1.8 billion in losses related to settlements for the Eaton Fire as of September 30, 2026, with further material losses probable due to ongoing litigation.
- Total capital expenditures for the nine months ended September 30, 2026, were $5.0 billion, reflecting continued investment in infrastructure and wildfire mitigation.
- SCE's credit ratings outlook from Fitch and S&P is 'Negative,' indicating potential concerns from rating agencies regarding wildfire risks and the lack of comprehensive legislative solutions.
- The company experienced a decrease in operating revenue of $743 million for the nine months ended September 30, 2026, compared to the prior year, largely due to lower pass-through costs and the absence of certain retroactive revenue recognition in 2025.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed October 29, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $4.89B$5.75B | −15.0% |
| Operating Expenses | $3.91B$4.32B | −9.5% |
| Operating Income | $980.00M$1.43B | −31.6% |
| Net Income | $751.00M$888.00M | −15.4% |
| EPS (Basic) | $1.88$2.16 | −13.0% |
| EPS (Diluted) | $1.87$2.16 | −13.4% |
| Shares Outstanding (Basic) | 385.00M385.00M | 0.0% |
| Shares Outstanding (Diluted) | 387.00M386.00M | +0.3% |
05—Questions
Frequently Asked Questions
What is the primary driver for the significant decrease in net income for Edison International and SCE in the nine-month period of 2026?
The substantial decrease in net income is primarily attributable to a significant reduction in non-core benefits from wildfire claims and expenses in 2026 compared to 2025. In 2025, the company recognized substantial benefits from settlements and insurance reimbursements related to past wildfire events, which were not as significant in the comparable period of 2026.
What is the company's exposure to future wildfire events, and how is it being managed?
Wildfire risk remains a significant concern. SCE has recorded substantial losses related to the Eaton Fire and anticipates further material losses. The company utilizes its Wildfire Mitigation Plan (WMP), Public Safety Power Shutoff (PSPS) program, and wildfire insurance, including a customer-funded self-insurance program. However, the ongoing litigation and the uncertainty surrounding regulatory and legislative solutions for wildfire liability present ongoing risks.
How is the company funding its significant capital expenditure program?
SCE funds its capital requirements through operating cash flows, capital market and bank financings, and equity contributions from Edison International. The company also expects to fund costs related to the Eaton Fire with proceeds from the Wildfire Fund. The capital program is substantial, focused on infrastructure modernization and wildfire risk mitigation.
What is the outlook for SCE's credit ratings, and what are the key factors influencing them?
SCE's credit ratings outlook from Fitch and S&P is 'Negative.' Key factors influencing these ratings include the persistent increase in wildfire frequency and severity, the potential for significant wildfire-related liabilities, and the lack of timely and consistent legislative and regulatory frameworks to adequately mitigate wildfire risk. Any material utility liability exposure or a determination that the Wildfire Fund is at risk of depletion could lead to further downgrades.
06—Continue