EIX Q2 2025 Filing: Rising Grid & Wildfire Costs Squeeze Profits

Edison International (EIX), the parent company of one of the nation's largest electric utilities, Southern California Edison (SCE), recently disclosed its financial performance for the second quarter of 2025. By examining the numbers in its latest 10-Q filing, we can gain a clearer picture of the company's operational health and the financial realities of powering a massive part of California.

For the three months ended June 30, 2025, Edison International reported total revenue of $4.54 billion, a modest increase from $4.34 billion in the same period last year. This revenue is primarily generated by its subsidiary, SCE, which serves a diverse customer base. The largest portion came from Commercial customers ($1.87 billion), followed by Residential customers ($1.51 billion), with the remainder from other sources.

To visualize how the company's revenue is transformed into profit after accounting for all costs and expenses, the following flow diagram breaks down the income statement for the quarter.

Rising Costs Outpace Revenue Growth

Despite the growth in revenue, profitability faced headwinds. The company's operating income fell to $775 million from $900 million in the prior-year quarter. Consequently, net income for the quarter was $398 million, a noticeable drop from the $509 million earned in Q2 2024.

The primary reason for this squeeze on profits was a significant increase in operating expenses, which climbed to $3.77 billion. Two key areas drove this increase:

• Operation and Maintenance: These costs jumped by nearly $300 million to $1.58 billion. This category includes essential work like grid inspections, vegetation management, and system repairs, reflecting heightened efforts to ensure safety and reliability.
• Depreciation and Amortization: This non-cash expense rose by $100 million to $826 million, signaling the impact of the company's substantial and ongoing investments in modernizing its infrastructure.

The Enduring Cost of Wildfire Risk

A unique and significant operational cost for California utilities is wildfire risk mitigation. The income statement shows a recurring $36 million expense for the Wildfire Insurance Fund. This fund, established by California legislation, serves as a form of collective insurance for major utilities to cover liability from catastrophic wildfires, highlighting the persistent financial impact of the state's environmental challenges. While no new net claims were recorded this quarter, the ongoing expense underscores the cost of doing business in the region.

The Path Forward

Edison International's second-quarter results paint a picture of a company navigating a complex and demanding landscape. While revenue continues to grow, the immense cost of maintaining, upgrading, and safeguarding its electrical grid in the face of regulatory demands and climate-related risks is putting significant pressure on its bottom line. For investors and observers, the key will be to watch how EIX balances these critical investments with its ability to manage costs and secure adequate revenue through regulatory processes, a dynamic that will shape its financial trajectory for years to come.