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BUY: Edison International (NYSE: EIX) $56.14 (6/18/07)

Sell price: $ 58.95 or
Sell date: July 18, 2007
Stop loss: $54.90 (-2.3%) - ATR(10) * 1.5

DI+/DI- bullish crossover
EMA bullish
Stochastic analysis very bullish
Nice consolidation and bounce off 50-day MA
MACD trending bullish this week, possible 0 crossover by end of week

On a GAAP basis, the company reported quarterly EPS of $1.23, compared to $1.33 in the year-ago quarter. The discrepancy between GAAP and adjusted EPS were due to non-cash accounting benefit from the final regulatory approval to transfer its Mountainview power plant to utility rate base.

Here’s a tricky question: should the average electric utility customer pay higher rates so that people who install solar systems can sell power back to the grid?

Edison International (EIX) reported that earnings in the first quarter fell from $0.91 per share to $0.76. This result kept the GCFR Overall Gauge of Edison in the low-30's, a weak score but better than it had been.

Our analysis report reviewed the first quarter in some detail. In summary, lower energy prices, especially for natural gas, reduced Edison's costs for fuel, purchased power, etc., by 13.5 percent. Revenue fell only 9.7 percent, however, and this gap had the beneficial effect of increasing Gross Margin profitability by a substantial 3 percent, from 29.6 percent to 32.6 percent.