July 31 (Reuters) - Edison International EIX.N reported a fall in second-quarter profit on Thursday, as the utility grappled with higher operating expenses while facing ongoing investigations related to the Los Angeles wildfires earlier this year.
Multiple wildfires scorched tens of thousands of acres across Los Angeles in what is expected to be the most costly natural disaster in U.S. history, and the area's electric utilities have come under increasing scrutiny.
While wildfires can cause extensive power outages by damaging power lines and infrastructure, they can also originate from these power lines, if not properly maintained.
Southern California Edison $(SCE.UK)$, Edison International's subsidiary, is facing multiple lawsuits, which allege that its electrical equipment started one of the major wildfires in the Los Angeles area – the Eaton fire.
According to a Reuters report in June, SCE's internal wildfire forecasts underestimated the potential size of the Eaton Canyon fire in Los Angeles by a factor of ten in the days leading up to a deadly conflagration in January.
The company attributed the earnings decline primarily to higher operations and maintenance expenses and the net impact of regulatory decisions at Southern California Edison (SCE). Higher interest expenses at the parent company level also contributed to the decrease.
The company also plans to launch a wildfire recovery compensation program.
The company reaffirmed its forecast for adjusted earnings between $5.94 per share and $6.34 per share for 2025. Analysts have estimated them at $6.06 per share.
"We remain confident that policymakers will act to strengthen and restore confidence in California's wildfire framework during the current legislative session," Edison CEO Pedro Pizarro said in a statement.
The Rosemead, California-based company posted a net income of $343 million, or 89 cents per share in the second quarter, compared with $385 million, or $1.14 per share a year earlier.
(Reporting by Khusbu Jena in Bengaluru; Editing by Leroy Leo)
((Khusbu.Jena@thomsonreuters.com;))