01—Abstract
Summary
Summary of the 8-K filed October 28, 2025. Cited figures are marked; the original filing is the authoritative source.
Edison International (EIX) reported third-quarter 2025 GAAP EPS of $2.16a (net income of $832 million) and core EPS of $2.34, up from $1.51 a year earlier.
The year-over-year core increase is largely a one-time true-up of roughly 55 cents tied to the 2025 General Rate Case (GRC) final decision, which is retroactive to January 1, 2025, so management described the comparison as not meaningful. Year-to-date core EPS is $4.68b versus $3.88 in 2024. Management narrowed 2025 core EPS guidance to $5.95-$6.20 (from $5.94-$6.34), with the midpoint lowered by about 10 cents to reflect potential costs of an early refinancing of parent-level preferred equity that resets in 2026 and 2027.
The quarter's most important developments are regulatory and legislative. California passed SB 254, which creates an up-to-$18 billionc Continuation Account for future wildfires (ignited after September 19, 2025), enhances the liability cap framework, and allows securitization of certain 2025 wildfire claims if the initial Wildfire Fund is exhausted. The Eaton Fire was confirmed as a "covered wildfire" eligible to access the fund, though the investigation is ongoing and management acknowledged that SCE's equipment could likely be found associated with the ignition.
The 2025 GRC decision authorized 91% of requested capital and about $9.7 billiond in 2025 base revenue. A Woolsey Fire settlement (about $2.0 billion of roughly $5.6 billion requested, subject to CPUC approval) would bring combined TKM and Woolsey recovery to about 43% of 2017/2018 event costs above insurance and FERC recoveries. Management reaffirmed its 2025-2028 core EPS CAGR target of 5-7% off a $5.84 baseline (implying $6.74-$7.14 for 2028), a 4-year capital plan of $28-29 billion, and 7-8% rate base growth.
The financing plan shows no equity issuance requirement, which is a change from prior annual equity needs of about $100 million. Key risks remain the uncertain total cost of the Eaton Fire, the pending CPUC decisions on Woolsey and cost of capital, the S&P downgrade of EIX and SCE by one notch, and the April 2026 Phase 2 report under SB 254 on long-term wildfire liability reform.
02—Key points
Key Highlights
- Q3 2025 GAAP EPS of $2.16 vs. $1.33 a year ago; core EPS of $2.34 vs. $1.51, with the increase driven mainly by a ~55-cent one-time GRC true-up retroactive to January 1, 2025.
- 2025 core EPS guidance narrowed to $5.95-$6.20 from $5.94-$6.34; midpoint reduced by ~10 cents for potential early refinancing costs tied to parent preferred equity.
- Reaffirmed 5-7% core EPS CAGR for 2025-2028 off a $5.84 baseline, implying 2028 core EPS of $6.74-$7.14; 2028 rate base guidance of $56.5-$57.5 billion.
- Passage of SB 254 creates an up-to-$18 billion Continuation Account for wildfires igniting after September 19, 2025, and enables securitization for certain 2025 wildfires if the initial fund is exhausted.
- Eaton Fire confirmed as a 'covered wildfire' eligible for the Wildfire Fund; management stated SCE's equipment could likely be associated with the ignition absent other evidence, and a partial settlement with one insurance claimant was reached at 52 cents per dollar paid.
- 2025 GRC final decision authorized 91% of requested capital expenditures and ~$9.7 billion of 2025 base revenue; capital plan of $28-29 billion for 2025-2028 with no equity issuance required in the financing plan.
- Woolsey settlement (~$2.0 billion of ~$5.6 billion requested) awaits CPUC approval; TKM settlement (~$1.6 billion) approved, with securitization proceeds expected by year-end 2025.
03—Questions
Frequently Asked Questions
Why is the year-over-year core EPS increase not a good indicator of underlying growth?
Q3 2025 core EPS of $2.34 includes a one-time true-up of about 55 cents for the 2025 GRC final decision, which is retroactive to January 1, 2025. Management characterized the comparison as not meaningful. Year-to-date core EPS of $4.68 (vs. $3.88) also includes a one-time ~30-cent TKM interest expense true-up, so investors should focus on the 2025 guidance range and the 2028 trajectory.
Why was the midpoint of 2025 guidance lowered, and does it affect long-term targets?
The narrowed range of $5.95-$6.20 (midpoint about $6.08) reflects roughly 10 cents of one-time costs for expected early refinancing of EIX preferred equity before year-end, which resets in March 2026 and March 2027. Management stated the 2025 baseline of $5.84 used for measuring the 5-7% CAGR is unchanged, and the refinancing is expected to provide longer-term financing cost benefits.
What is the financial exposure from the Eaton Fire, and how is it funded?
Management said it cannot yet estimate probable losses for the Eaton Fire. SB 254 allows SCE to issue securitized bonds before a reasonableness review if the initial Wildfire Fund is exhausted for fires igniting between January 1 and September 19, 2025, and management stated neither equity nor debt would need to be issued for this event under the current framework. Investigations are ongoing, and the company noted that a single insurance settlement at 52 cents per dollar is not sufficient to estimate total losses. Investors should monitor the investigation and any further claims developments closely.
Does the company still plan to issue equity, and how strong is the balance sheet?
Management stated the 2025-2028 financing plan requires no equity issuance, compared with prior expectations of roughly $100 million in annual equity needs. This is supported by expected TKM securitization proceeds (~$1.6 billion by year-end 2025) and Woolsey securitization proceeds (~$2.0 billion expected mid-2026, subject to approval). Management said FFO-to-debt should be within its 15-17% target without equity issuance, though S&P downgraded EIX and SCE by one notch, while Moody's affirmed stable outlooks and Fitch removed its Rating Watch Negative.
What are the key regulatory and legislative milestones to watch?
Key near-term items include: a CPUC proposed and final decision on the Woolsey settlement (expected late 2025 or early 2026), the CPUC cost of capital decision for 2026-2028 (current CPUC ROE of 10.33%), the SB 254 Phase 2 report from the California Energy Commission-administered assessment due April 1, 2026, and the NextGen ERP application. The Woolsey securitization, if approved, is expected to bring about $2.0 billion of proceeds around mid-2026. Investors should also watch the Wildfire Recovery Compensation Program for the Eaton Fire, which SCE planned to launch shortly after the report.
04—Continue