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Entergy (ETR) Misses Q1 Earnings Estimates on Mild Weather

Zacks Equity Research

Entergy Corporation ETR reported first-quarter 2017 operational earnings of 99 cents per share, lagging the Zacks Consensus Estimate of $1.06 by 6.6%. The reported number also dropped 26.7% from $1.35 reported a year ago.

The year-over-year decline in earnings was primarily due to higher operating expenses and mild weather, which had a negative impact of 16 cents in the reported quarter.

 


On a GAAP basis, Entergy reported first-quarter 2017 earnings of 46 cents per share, compared with the year-ago-period earnings of $1.28. The difference between GAAP and operating earnings in the reported quarter was due to one-time charges of 53 cents.

Total Revenue

In the quarter under review, Entergy reported total revenue of $2,588.5 million, beating the Zacks Consensus Estimate of $2,566 by 0.9%. However, it was down 0.8% from the year-ago figure of $2,609.8 million.

Segment Results

Utility, Parent & Other: The segment’s quarterly earnings were 62 cents per share compared with 84 cents in the prior-year quarter.

Entergy Wholesale Commodities (EWC): The segment reported operating earnings of 37 cents per share, compared with 51 cents earned in the year-ago quarter.

Highlights of the Release

Operating expenses in the reported quarter were $2.42 billion, up 14.7% from $2.11 billion spent in the year-ago quarter. The year-over-year increase was primarily due to higher purchased power, and other operation and maintenance expenses.

Interest expenses were $171.1 million, down 1.6% from the year-ago quarter.

In the reported quarter, total retail customers served by the company increased by 1.1% to nearly 2.9 million. However, the demand for electricity dropped 2.2% year over year to 28,808 gigawatt hours (Gwh) due to mild winter weather.

Entergy Corporation Price, Consensus and EPS Surprise

 

Entergy Corporation Price, Consensus and EPS Surprise | Entergy Corporation Quote

Financial Highlights

As of Mar 31, 2017, the company had cash and cash equivalents of $1,083.0 million compared with $1,187.8 million as of Dec 31, 2016.

Total debt, as of Mar 31, 2017, was $13.9 billion compared with $14.5 billion as of Dec 31, 2016.

For first-quarter 2017, cash from operating activities was $529.4 million, down from $532.8 million in the prior-year quarter.

Guidance

Entergy reiterated its operational earnings per share in the band of $4.75−$5.35 for 2017.

The Utility, Parent & Other’s adjusted earnings are expected in the range of $4.25–$4.55 per share.

Zacks Rank

Entergy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

NextEra Energy, Inc. NEE  reported first-quarter 2017 adjusted earnings of $1.75 per share, beating the Zacks Consensus Estimate of $1.56 by 12.2%.

DTE Energy DTE reported first-quarter 2017 earnings of $1.79 per share, beating the Zacks Consensus Estimate of $1.57 by 14.0%.

Upcoming Release

American Electric Power Company AEP is expected to report its first-quarter 2017 results on Apr 27, 2017. The Zacks Consensus Estimate is pegged at 97 cents.

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