Edison International(US:EIX)2024-02-23 01:54Financial Data and Key Metrics Changes - The company reported core EPS of $4.76 for the full year 2023, which was above the midpoint of the guidance range [12] - For 2024, the EPS guidance is set between $4.75 and $5.05, indicating modest growth despite strong rate base earnings growth [1][16] - The core EPS for Q4 2023 was $1.28, reflecting a year-over-year increase of $0.13 primarily due to higher GRC revenue and lower O&M [12] Business Line Data and Key Metrics Changes - The utility plans to invest $38 billion to $43 billion from 2023 to 2028, focusing on distribution grid improvements, wildfire mitigation, and infrastructure replacement [13] - Operational variances are not a significant driver of earnings growth, remaining in line with historical levels [5][46] Market Data and Key Metrics Changes - The company expects a 2% annual increase in electricity usage over the coming years, following years of flat demand [24] - The company has achieved an 85% to 88% risk reduction in wildfire risk compared to pre-2018 levels due to enhanced mitigation efforts [17] Company Strategy and Development Direction - The company aims for a core EPS growth target of 5% to 7% from 2021 to 2025 and 2025 to 2028, focusing on long-term investments in operational excellence and reliability [4][7][11] - The strategy includes significant investments in digital and AI capabilities to enhance operational efficiency and customer service [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving long-term EPS growth targets despite challenges from wildfire-related debt and interest expenses [4][16] - The company anticipates that headwinds in 2024 will moderate going into 2025, supporting its growth outlook [6] Other Important Information - The company raised its annual dividend by 5.8%, marking the 20th consecutive annual increase, reflecting management's confidence in future performance [19] - The company is actively pursuing cost recovery for past wildfire mitigation spending, which could provide substantial value [21] Q&A Session Summary Question: How does the company plan to update assumptions regarding wildfire debt drag? - Management indicated that they are refining cost estimates and will provide updates as they progress with the TKM recovery [37][39] Question: Can you elaborate on the $0.15 to $0.20 O&M reinvestment and its impact? - Management clarified that the reinvestment is aimed at long-term operational excellence and reliability improvements, not a one-time offset [41][46] Question: What is the outlook for the FERC transmission projects? - Management stated that they bid on two projects and expect to know the results in the spring [47] Question: How does the company view the cost of capital mechanism? - Management sees it as a hedge against interest rate changes and an opportunity for reinvestment in the business [45][79] Question: What is the expected impact of the building electrification proposal? - Management emphasized that the denial of the building electrification application does not affect the EPS growth targets for 2025 and 2028 [88]