Entergy Corporation (ETR) has reported robust earnings per share (EPS) of $1.33 in the first quarter of fiscal 2010, soundly beating both the Zacks Consensus Estimate of $1.31 and the year-ago quarterly EPS of $1.29. On a reported basis, including one-time items, earnings came in at $1.12 in the reported quarter (specify the quarter) compared with $1.20 in the year-ago quarter.
 
Operational Results
 
Revenue in the reported quarter fell 1.1% year over year to $2.8 billion, with Electricity down 1% and Competitive Businesses down 4.6%, while Natural Gas was up 29.7%.
 
Residential sales increased 22.2% compared with the year-ago quarter, commercial sales increased 4.5%, governmental sales increased 5.3% and industrial sales increased 7.3%. Overall volume sales increased 10.7% in the reported quarter.
 
On an operational basis, earnings were $253.7 million compared with $252.6 million in the first quarter of 2009. Entergy reported earnings of $213.8 million compared with $235.3 million in the year-ago quarter.
 
Segmental Results
 
Utility: The segment’s reported and operating earnings were $138.6 million, or 73 cents per share, compared with $111.6 million, or 56 cents per share, in the year-ago quarter. The upside came from higher net revenue due to increased sales across all customer classes and rate adjustments at Entergy Gulf States Louisiana, Entergy Louisiana and Entergy Mississippi under their formula rate plans. This was partially offset by higher non-fuel operation and maintenance expense resulting primarily from higher pension and benefits expense.
 
Residential sales on a weather-adjusted basis increased 3.9% compared with the first quarter of 2009. Commercial and governmental sales, on a weather-adjusted basis, increased 3.2% year over year. Industrial sales in the first quarter increased 7.3% compared with the same quarter of 2009.
 
Entergy Nuclear: Entergy Nuclear earned $94.2 million, or 49 cents per share, on an as-reported basis compared with as-reported earnings of $180.9 million, or 91 cents per share, in the first quarter of 2009. On an operational basis, first quarter 2010 Entergy Nuclear’s earnings were $148.6 million, or 78 cents per share versus $187.5 million, or 95 cents per share, in the first quarter of the prior year.
 
Entergy Nuclear’s operational earnings decreased as a result of lower net revenue primarily due to lower pricing. Contributing to the decrease in earnings were higher non-fuel operation and maintenance expenses primarily due to the tritium remediation work at the Vermont Yankee site, higher pension and benefits expense, refueling amortization expense, and insurance expense.
 
Parent & Other: Parent & Other reported a loss of $19.1 million, or 10 cents per share, on an as-reported basis in first quarter of 2010 compared with an as-reported loss of $57.2 million, or 27 cents per share, in the first quarter of 2009. On an operational basis, Parent & Other reported a loss of $33.5 million, or 18 cents per share, in the current quarter and a loss of $46.5 million, or 22 cents per share, in first quarter of 2009.
 
Lower interest expense due to lower borrowings, including Parent debt redemptions, was the primary factor that influenced the change in operational results at Parent & Other for the reported quarter.
 
Guidance
 
Entergy reaffirmed its fiscal 2010 earnings guidance in the range of $6.40−$7.20 per share on an operational basis and $5.95 – $6.80 per share on an as-reported basis. Currently, the Zacks Consensus Estimate for 2010 is $6.70.

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