Based on the outperformance at Entergy Corporation’s (ETR) utility and parent company operations in the September quarter, management expects earnings in the third quarter of 2010 to rise 13% from the year-ago level. Entergy anticipates earnings to come in at $2.61 per share compared to $2.32 in the year-ago quarter.
Entergy’s operating earnings in the quarter are expected to rise to $2.75 per share from $2.40 in the third quarter of 2009. The company’s preliminary projections for the quarter are well above the Zacks Consensus earnings estimate of $2.47 per share.
The company is scheduled to release its third quarter 2010 financial results on Thursday, October 21, 2010.
This boost in earnings during the September quarter is due to higher earnings at the Utility and Parent & Other segments, as well as the company’s share buyback program. This was, however, partially offset by lower results at Entergy Nuclear.
Improved Utility earnings in the quarter reflect higher revenues, driven by improved volumes and warmer-than-usual weather. However, Utility earnings were slightly offset by increase in operation and maintenance expense. Parent company results basically improved due to lower income tax. Nuclear segment results drooped on account of lower revenues, which were hurt by lower generation and unplanned outage days.
Apart from projecting robust earnings for the just-ended quarter, Entergy reaffirmed its earnings guidance ranges for 2010. The company expects reported earnings of $5.95 to $6.80 per share and operating earnings of $6.40 to $7.20 per share for 2010. The Zacks Consensus Estimate for 2010 is $6.82, which lies well within the company’s operating earnings guidance range.
Looking back, we note that Entergy has consistently outperformed the Zacks Consensus Estimates in the past year. Of the trailing four quarters, the company showed positive earnings surprises in the last three quarters, with a four-quarter average surprise of 2.00%.
New Orleans-based Entergy Corp. is primarily engaged in electric power production and the retail distribution of power. With 30,000 MW of generating capacity, it distributes electricity to 2.6 million customers in Arkansas, Louisiana, Mississippi and Texas.
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