Guidance from Entergy Corporation – Analyst Blog

Integrated energy company Entergy Corporation (ETR) provided preliminary operating earnings expectation of $1.70 per share for the second quarter of 2010. The guidance of the company is 6 cents higher than the Zacks Consensus expectation of $1.64 per share. The guidance reflects a 47 cents increase from year-ago levels. Entergy expects GAAP earnings for the second quarter of 2010 to be $1.64 per share versus $1.14 per share reported in the second quarter of 2009.

 

The difference between Entergy’s operating and GAAP earnings guidance is due to the impact of expenses associated with the planned spin-off of the non-utility nuclear business.

 

The expected year-over-year improvement in operating performance for the second quarter of 2010 is attributable to higher earnings at Utility and Entergy Nuclear segments, partially offset by lower results at Parent & Other.

 

The improvement in Utliity earnings during the second quarter of 2010 is attributable to higher net revenue due to increased sales volumes across all customer classes and the absence of a regulatory charge recorded in the prior-year period. Higher interest expenses are expected to offset results marginally.

 

The improvement in Entergy Nuclear earnings during the quarter is driven by higher net revenue and other income, partially pinned down by an increase in non-fuel operation and maintenance expense.

 

The decline in Parent and Other earnings is due to higher income tax expenses compared with the preceding quarter.

 

 

Entergy reaffirmed the GAAP guidance range of $5.95 to $6.80 per share and $6.40 to $7.20 per share on an operational basis for 2010. The GAAP guidance for the year includes the impact of a potential charge in connection with the internal restructuring related to Enexus and EquaGen.

 

 

The Zacks Consensus Estimates for third-quarter 2010, fiscal year 2010 and fiscal year 2011 are $2.50 per share, $6.71 per share and $6.96 per share, respectively.

 

Growth at Entergy will be driven mainly by its non-fossil based generation assets and the prudent mix of regulated business and merchant business. We presently retain our Neutral rating and Zacks #4 (Sell) Rank on the stock.