Edison International (EIX) increased the quarterly dividend on its common stock from 31 cents per share to 31.5 cents per share. The higher dividend is payable on Jan 31, 2010, to shareholders of record on Dec 31, 2009. This action increases the annual dividend from $1.24 per share to $1.26 per share.

Edison International had cash and cash equivalents of $2.4 billion at the end of the first nine months of fiscal 2009 from $3.9 billion at year-end fiscal 2008. The company reported $2.1 billion in cash from operating activities at the end of the first nine months of fiscal 2009, compared to $1.6 billion at the end of the first nine months of fiscal 2008. Long term debt decreased to $10.4 billion at the end of the first nine months of fiscal 2009 from $11 billion at the end of fiscal 2008.

Edison International’s revenue in the recent quarter fell 14.7% year-over-year to $3.7 billion from $4.3 billion. The decline was significant in electric utility revenue (83.7% of total revenues), which decreased 11.6% year-over-year. Competitive power generation revenues fell 27.2% to $592 million. Financial services and other revenues were only $7 million in the reported quarter, down from $14 million in the year-ago quarter.

However, with consistent performance from its solid base of stable utility operations, rate hikes, and ongoing alternative energy projects, partially offset by a stagnant economy, volatile gas prices, low-hedged power output and coal positions, as well as risks regarding recovery of capital expansion costs, the future looks promising for Edison International.

California-based Edison International is a utility holding company operating through its principal subsidiaries – Southern California Edison Company, Edison Mission Energy, and Edison Capital.

Southern California Edison is a public utility providing electricity to central, coastal, and southern California (excluding Los Angeles). The subsidiary accounts for roughly 80% of Edison International’s total revenue and is one of the nation’s largest electric utilities serving a population of 13 million, through 4.9 million customer accounts in a 50,000 square mile service area.

Edison Mission Group is an independent power producer with net generation capacity of nearly 9,849 MW. In addition to power generation, the company is involved in price risk management and wholesale energy marketing and trading activities. Edison Capital, another subsidiary, holds investments in energy and infrastructure projects.

Edison International recently narrowed its core earnings guidance of $2.90 – $3.20 per share for fiscal 2009 to $2.95 – $3.15 per share. Similarly, the company updated its 2009 GAAP earnings guidance from $2.18 – $2.48 to $2.23 – $2.43. We reiterate our Neutral recommendation on the stock.

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