Technology

Entergy (ETR) Down 7.1% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Entergy (ETR). Shares have lost about 7.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Entergy due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Entergy's Q2 Earnings Beat Estimates, Revenues Fall Y/Y

Entergy Corporation reported second-quarter 2020 adjusted earnings of $1.37 per share, which surpassed the Zacks Consensus Estimate of $1.23 by 11.4%. Moreover, the bottom line improved 1.5% from $1.35 per share in the year-ago quarter.

Excluding the effects of special items, the company registered GAAP earnings of $1.79 per share compared with $1.22 a year ago.

Total Revenues

In the quarter under review, total revenues came in at $2,412.8 million, which lagged the Zacks Consensus Estimate of $2,806 million by 14%. Also, the top line fell 9.5% from the year-ago quarter’s $2,666.2 million.

Segment Results

Utility: The segment’s quarterly adjusted earnings came in at $1.71 per share compared with $1.70 in the prior-year quarter.

Parent & Other: The segment incurred an adjusted loss of 34 cents per share compared with a loss of 35 cents in the prior-year quarter.

Entergy Wholesale Commodities (EWC): The segment registered earnings of 42 cents per share on an as-reported basis against a loss of 13 cents in the year-ago quarter.

Highlights of the Release

Operating expenses in the quarter summed $1,973.5 million, down 15.2% from $2,327.4 million in the year-ago quarter.

Interest expenses were $216.8 million, up 7.8% from $201.1 million in the year-ago quarter.

In the reported quarter, total retail customers served by the company increased 1.1% to nearly 2.94 million.

Financial Highlights

As of Jun 30, 2020, Entergy had cash and cash equivalents of $935.5 million compared with $425.7 million as of Dec 31, 2019.

Long-term debt was $18.28 billion as of Jun 30, 2020, compared with $17.08 billion as of Dec 31, 2019.

At the end of the first half of 2020, the company generated cash from operating activities of $1,448.3 million, down from $1,053.1 million in the prior-year quarter.

Guidance

For 2020, Entergy reaffirms adjusted EPS of $5.45-$5.75 per share. The Zacks Consensus Estimate for the company’s earnings is currently pegged at $5.54, below the midpoint of the company’s guidance range.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, Entergy has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Entergy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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