Edison International (EIX) shares plunged 5.13% in pre-market trading on Wednesday following the release of the company's first-quarter 2025 earnings report and concerning disclosures about potential wildfire liabilities.

The utility company reported core earnings per share of $1.37 for Q1 2025, compared to $1.13 a year ago. However, executives cautioned that this year-over-year comparison is not particularly meaningful due to the pending decision on Edison's 2025 General Rate Case. More importantly, the company disclosed that it is now "probable" that Edison International and its subsidiary Southern California Edison (SCE) will incur material losses related to the Eaton Fire that occurred in January 2025.

While Edison maintains that it has not conclusively determined its equipment was associated with the ignition of the Eaton Fire, the company stated it is "not aware of evidence conclusively pointing to another source of ignition." This disclosure, along with ongoing wildfire mitigation challenges and regulatory uncertainties, appears to have spooked investors. The potential for significant wildfire-related liabilities remains a key concern for California utilities, even with the state's wildfire fund in place to help cover damages.