Entergy Arkansas Inc., a unit of Entergy Corporation (ETR), announced plans to buy back all of its 6% and 6.70% series bonds on November 8, 2010. The bonds to be redeemed include all of the company’s outstanding First Mortgage Bonds in the 6% Series due November 1, 2032 and 6.70% Series due April 1, 2032, worth $100 million each.

 

The 6% Series Bonds are listed on the New York Stock Exchange and trade under the symbol EHB; and the 6.70% Series Bonds are listed on the New York Stock Exchange and trade under the symbol EHA.

 

In each case, the redemption price will be 100% of the respective principal amount thereof plus accrued interest on the respective series.

 

On the redemption date, the company will pay each bond holder as per the pre-decided redemption price. Further, the company stated that these bonds will cease to bear interest on and after the redemption date.

 

New Orleans-based Entergy Corp. is primarily engaged in electric power production and retail distribution of power. With 30,000MW of generating capacity, it distributes electricity to 2.6 million customers in Arkansas, Louisiana, Mississippi and Texas.

 

The company’s balance sheet at the end of first half of 2010 was strong, with a total liquidity of $2.6 billion, comprising $1.3 billion of cash and $1.3 billion of unutilized credit facility, and a long-term debt-to-capitalization ratio of 54.9%.

 

In the most recent quarter, Entergy reported earnings per share (EPS) of $1.17, beating both the Zacks Consensus Estimate of $1.38 and the year-ago quarterly EPS of $1.23. Entergy’s earnings guidance for fiscal 2010 is $6.40-$7.20 per share on an operational basis and $5.95-$6.80 per share on a reported basis.

 

The Zacks Consensus estimates project the company’s operating earnings to be slightly above the higher-end of the guidance. Our EPS estimates for 2010 and 2011 are $6.82 and $6.85, respectively.

 

Entergy is scheduled to release its third quarter 2010 financial results on October 21, 2010.

 

Entergy currently has a short term Zacks #3 Rank (Hold). We maintain our Neutral recommendation on the stock.

 
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