Entergy Corporation (ETR) reported strong earnings per share (EPS) of $1.75 in the fourth quarter of fiscal 2009, soundly beating both the Zacks Consensus Estimate of $1.64 and the year-ago quarterly EPS of 99 cents. The upside came from lower taxes and lower operational costs.
 
Of the 15 analysts covering the stock, 7 have upped their estimates for fiscal 2010, along with two positive revisions over the last 7 days. Currently the Zacks Consensus Estimate for 2010 is $6.46, which is a tad lower than the fiscal 2009 EPS of $6.67. In fiscal 2008, Entergy registered an EPS of $6.51.
 
Revenue in the reported quarter fell 16.7% to $2.5 billion from $3 billion in the year-ago quarter, with Electricity down 24.2% and Natural Gas down 19.8%, while Competitive Businesses was up 9.8%. Residential sales increased 6.1% compared to the year-ago quarter, commercial sales increased 3.4%, governmental sales increased 5.4% and industrial sales increased 7.1%. Overall volume sale increased 4.4% in the reported quarter. The company was able to improve upon the overall headcount of customers year-over-year by 1.1%, barring the industrial customers which shrunk 3.3%.
 
Segmental Results
 
Utility, Parent & Other segment reported earnings of $116.2 million, or 61 cents per share, compared to a loss of $62.5 million, or 33 cents, in the year-ago quarter. Earnings were boosted by higher revenues, lower income tax expense and the absence of regulatory charges. Revenue was boosted by higher sales.
 
Entergy Nuclear segment earned $181.5 million or 95 cents per share compared to $226.6 million, or $1.18, in the year-ago quarter. Entergy Nuclear’s earnings were affected by higher income tax expense, and increased operation and maintenance expense. This was partially offset by higher power generation due to lower refueling outage days and higher rates.
 
Entergy’s Non-Nuclear Wholesale Assets segment earned $37.2 million, or 19 cents per share compared to $26.5 million, or 14 cents, in the year-ago quarter. Income tax benefits were the primary driver for the growth in earnings. The reported quarter reflects a tax benefit recognized on a capital loss associated with the sale of stock of a merchant fossil generation subsidiary to a third party.
 
Financial Condition
 
Entergy ended fiscal 2009 with cash and cash equivalents of $1.7 billion. At year-end fiscal 2008, the company had $1.9 billion in cash and cash equivalents. The company generated $2.9 billion of cash from operating activities at the end of fiscal 2009, compared to $3.3 billion generated in fiscal 2008. Long-term debt decreased to $10.7 billion at the end of fiscal 2009 from $11.2 billion at the end of fiscal 2008.
 
Guidance
 
Entergy reaffirmed its fiscal 2010 earnings guidance in the range of $6.40−$7.20 per share on an operational basis and $6.15–$6.95 per share on an as-reported basis.
Read the full analyst report on “ETR”
Zacks Investment Research