Integrated energy company, Entergy Corporation (ETR) provided first-quarter 2012 preliminary loss expectation of 87 cents per share on a reported basis and operational earnings of 43 cents per share. First quarter 2012 results included two non-cash charges arising from asset impairment and a write-off of a regulatory asset. Results for first quarter 2011 were $1.38 per share on both an as-reported basis and an operational basis. Entergy also updated its previously issued operational earnings guidance for 2012.
Entergy is slated to release its first-quarter 2012 numbers on April 26, 2012.
Segment Details
Utility
The quarter-over-quarter decrease in Utility’s operational earnings was due primarily to higher income tax expense and lower net revenue. The increase in income tax expense resulted from a first quarter 2012 non-cash adjustment of approximately 25 cents per share to write off a regulatory asset for income taxes. Higher non-fuel operation and maintenance expenses also contributed to the lower earnings results.
Utility net revenue declined due to unfavorable weather variance reducing sales volumes compared to the first quarter of 2011. Partially offsetting was growth in weather-adjusted sales volumes.
Entergy Wholesale Commodities
On an operational basis, Entergy Wholesale Commodities’ first quarter 2012 earnings were below the prior-year period largely due to lower net revenue. This decline in net revenue was driven primarily by lower pricing associated with the nuclear fleet. Also contributing to the lower results was an increase in non-fuel operation and maintenance expenses.
Parent & Other
Parent & Other’s operational results declined during the quarter due to several individually insignificant items.
Fiscal 2012 Guidance
As a result of the non-cash write-offs discussed above and unfavorable weather in the first quarter of 2012, Entergy updated its 2012 operational earnings guidance to a range of $4.85 to $5.65 per share. The revised operational guidance range also reflects lower-than-planned pension discount rate and other updated pension assumptions and lower market energy prices. Entergy’s previous guidance range was $5.40 to $6.20 per share on an operational basis. Special items for the first quarter of 2012 are expected to total approximately $(1.30) per share.
New Orleans, Louisiana based Entergy is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas.
Entergy Corporation currently retains a Zacks #3 Rank (short-term Hold rating). The company competes with American Electric Power Company Inc. (AEP), CenterPoint Energy Inc. (CNP) and Southern Company (SO).
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