Entergy’s second quarter income up 272%, well above Wall Street estimates

by Wesley Brown ([email protected]) 449 views 

Entergy's Arkansas Nuclear One power plant in Russellville, Ark. (photo from Entergy)

Entergy Corp.’s profits jumped 272% from a year ago as the New Orleans-based parent of Entergy Arkansas saw strong growth in its utility operations and robust industrial sales to both new and existing customers in the second quarter, the company announced ahead of Tuesday’s (Aug. 2) opening bell.

For the period ended June 30, Entergy reported second quarter earnings of $557.7 million, or $3.11 per share, compared to $148.9 million, or 83 cents per share, in the same period a year ago. Revenues fell 10.9% to $2.46 billion, compared $2.71 billion in the second quarter of 2015.

Wall Street analysts had expected the utility operator to report second quarter earnings of $1.05 per share on revenue of $2.89 billion, according to Thomson Reuters.

“We delivered solid results through the first half of the year, and we continue to make progress toward meeting our objective of steady, predictable growth at the Utility while reducing our EWC footprint,” Entergy Chairman and CEO Leo Denault said in the report. “As-reported earnings for both businesses were higher than expected, with Utility, Parent & Other Adjusted earnings substantially higher than last year and in line with our growth expectations for our core business. We are confident we can deliver on our 2016 commitments, as well as our Utility, Parent & Other long-term outlook.”

Companywide, second quarter earnings were $1.77 on an as-reported basis and $1.18 on an adjusted basis. In comparison, second quarter 2015 as-reported EPS were 85 cents and adjusted EPS were 87 cents. The current period results reflected growth in the utility business, including effects of new rate actions that recover investments and improve returns, as well as income tax items recorded during the quarter.

Industrial sales were higher on continued growth for new and expansion customers as well as higher sales to existing customers. New and expansion customers across several sectors continued to operate, ramp up and come online. For existing customers, petroleum refiners comprised the majority of that increase as they continued to operate at high capacity levels compared to last year.

In Entergy’s wholesale commodities (EWC) business, the utility giant reported earnings of $1.39 per share on an as-reported basis and $1.34 per share on an operational basis for second quarter 2016. EWC recorded a 2 cents per share loss in second quarter 2015 on both an as-reported basis and an operational basis.

The EWC quarter-over-quarter increase was due largely to income tax items recorded in the current quarter, which increased earnings per share $1.33. EWC second quarter 2016 as-reported EPS included 5 cents for special items resulting from the decisions to close certain nuclear plants.

Entergy updated its full-year guidance to be in the range of $6.60 to $7.40 and reaffirmed its utility and parent company earnings expectations of $4.20 to $4.50.

Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including nearly 10,000 megawatts of nuclear power. Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas.

Ahead of Tuesday opening bell, Entergy’s stock (NYSE: ETR) was trending higher in the pre-market session at $82.50, up $1.5% or $1.23 per share. The utility’s shares have traded in the range of $61.27 and $82.09 in the past 52 weeks.