Back to Main

Entergy Beats on Earnings and Revs - Analyst Blog

By: Zacks.com
Posted: 10/29/2013 12:20:00 PM
Referenced Stocks: BIP;ETR;EXC;LNT

Before the bell, Entergy Corp. ( ETR ) posted operational earnings of $2.41 per share, ahead of the Zacks Consensus Estimate of $2.29 by 5.2% and the year-ago profit of $1.95 by 23.6%.

The significant increase came on the back of higher net revenue and a lower effective income tax rate, partially offset by higher non-fuel operation and maintenance and depreciation expenses.

Operational Results

Revenue in the reported quarter boosted 13.1% year over year to $3,352.0 million. The top line also surpassed the Zacks Consensus Estimate of $3,142.0 million.

Of this Electricity revenue was up 16.6% to $2,704.8 million and Natural Gas sales increased almost 10.9% to $26.1 million, while Competitive Business revenue increased marginally by 0.2% to $621.0 million.

Segment Results

Utility

Utility's quarterly earnings were $348.0 million on an as-reported basis and $363.3 million on an operational basis, compared with $296.2 million on as-reported and $306.8 million on operational basis in the third quarter 2012. The year-over-year increase was largely due to higher net revenue and lower income tax expense. However, the positives were partly tempered by higher non-fuel operation and maintenance and depreciation expenses.

Entergy Wholesale Commodities

Entergy Wholesale Commodities' as-reported loss was $92.8 million while operational earnings were $82.3 million for third quarter 2013. During the corresponding quarter last year, earnings on an as-reported as well as operational basis were $86.8 million. The drop was attributable to higher depreciation expense.

Parent & Other

The Parent & Other segment narrowed its loss in the reported quarter as lower income tax expense positively affected results. The unit reported a loss of $15.3 million on both as-reported basis and an operational basis for third quarter 2013. This compares to a loss of $45.9 million on an as-reported and operational basis in the third quarter 2012.

Financial Condition

The company generated $1,083.6 million of net cash from operating activities compared with $1,031.9 million in the third quarter 2012. Cash and cash equivalents at the end of the reported period were $365.3 million versus $532.6 million at year-end 2012. Long-term debt decreased to $12,275.5 million from $13,473 million at year-end 2012.

Guidance

Entergy maintained its 2013 earnings guidance in the range of $4.60 to $5.40 per share on an operational basis. The company also initiated its 2014 operational earnings in the range of $4.60 to $5.40 per share.

Zacks Rank

Entergy − the second largest U.S. nuclear power generator after Exelon Corporation ( EXC ) − has a Zacks Rank #2 (Buy). Entergy is well positioned due to its geographically diverse mix of regulated and merchant operations. Initiatives like human capital management taken by the company will help in achieving its growth objectives. Other stocks that are worth considering in the space are Alliant Energy Corporation ( LNT ) and Brookfield Infrastructure Partners L.P. ( BIP ), both with a Zacks Rank #2 (Buy).



BROOKFIELD INFR (BIP): Free Stock Analysis Report

ENTERGY CORP (ETR): Free Stock Analysis Report

EXELON CORP (EXC): Free Stock Analysis Report

ALLIANT ENGY CP (LNT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research