Entergy (ETR) Misses Q2 Earnings, Up Y/Y on Higher Revenues

Zacks

Entergy Corporation (ETR) posted second quarter 2014 operational earnings of $1.11 per share in the quarter, higher than the year-ago number of $1.01 per share by 9.9%. However, the reported number failed to surpass the Zacks Consensus Estimate of $1.14. Quarterly earnings increased on the back of strong performance from its Utility and Entergy Wholesale Commodities units.

 

 

Excluding special items of 6 cents, the company’s quarterly GAAP earnings rose 14.1% year over year to $1.05 per share.

Operational Results

In the quarter under review, Entergy’s total operating revenues of $2,996.7 million surpassed the Zacks Consensus Estimate by 5.3%. Reported revenues surged 9.1% year over year, primarily due to improvement in Electric (up 9.0% year over year), Natural Gas (up 4.7% year over year) and Competitive business (up 11.4% year over year) sales.

Segment Results

Utility: The segment’s quarterly earnings were $207.8 million on an as-reported basis and $211.3 million on an operational basis compared with $196.2 million on as-reported and $211.1 million on operational basis in second-quarter 2013. The year-over-year increase was largely due to higher revenues as well as lower non-fuel operation and maintenance expenses.

Entergy Wholesale Commodities (EWC): Entergy Wholesale Commodities' as-reported earnings were $25.9 million while operational earnings were $33.4 million for second-quarter 2014. During the corresponding quarter last year, earnings on an as-reported as well as operational basis were $11.5 million and $12.7 million, respectively. The improvement in operational earnings was primarily due to a rise in other income.

Parent & Other: In the reported quarter, the unit incurred a loss of $44.3 million on both as-reported and operational basis. This compares to a loss of $44.0 million on as-reported and operational basis in the year-ago quarter.

Financial Condition

As of Jun 30, 2014, Entergy’s total cash and cash equivalents were $650 million compared with $311 million at the end of second quarter 2013.

Long-term debt as of Jun 30, 2014 totaled $12.2 billion versus $12.1 billion as of Dec 31, 2013.

Total operating cash flow was $761 million versus $572 billion in the year-ago comparable period.

Entergy’s capital expenditure was $476.3 million in the second quarter compared with $613.0 million a year ago.

Guidance

Entergy maintained its 2014 earnings guidance in the range of $5.55–$6.75 per share on an operational basis.

Zacks Rank

Entergy currently has a Zacks Rank #2 (Buy). Other companies in the utility industry with a better Zacks Rank include Consolidated Edison, Inc. (ED), Westar Energy, Inc. (WR) and Wisconsin Energy Corp. (WEC), all with a Zacks Rank #1 (Strong Buy).

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