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Entergy (ETR) Up 6.8% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Entergy (ETR - Free Report) . Shares have added about 6.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Entergy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Entergy Q2 Earnings Miss Estimates, Revenues Rise Y/Y

Entergy reported second-quarter 2021 adjusted earnings of $1.34 per share, which missed the Zacks Consensus Estimate of $1.41 by 5%. Moreover, the reported figure declined 2.2% from $1.37 in the year-ago quarter.

The company reported GAAP loss of 3 cents per share against earnings of $1.79 a year ago.

Total Revenues

Entergy’s second-quarter revenues of $2,822.1 million exceeded the Zacks Consensus Estimate of $2,481.9 million by 13.7%. Further, revenues improved 17% from $2,412.8 million in the year-ago quarter, primarily due to higher Electric revenues.

Segment Results

Utility: The segment’s quarterly earnings came in at $1.62 per share compared with $1.71 in the prior-year quarter.

Parent & Other: The segment incurred a loss of 28 cents per share compared with a loss of 34 cents in the prior-year quarter.

Highlights of the Release

Operating expenses in the second quarter were $2.65 billion, up 34.5% from $1.97 billion in the year-ago quarter.

Operating income during the quarter totaled $168.2 million compared with $439.3 million in the year-ago quarter.

Interest expenses were $213.4 million, up 4.3% from $204.7 million in the year-ago quarter.

In the reported quarter, total retail customers served by the company increased 0.9% to 2.97 million.

Financial Highlights

As of Jun 30, 2021, the company had cash and cash equivalents of $686.9 million compared with $1,759.1 million as of Dec 31, 2020.

Long-term debt was $24.2 billion at the end of second-quarter 2021 compared with $21.2 billion as of Dec 31, 2020.

At the end of second-quarter 2021, the company generated cash from operating activities worth $796.1 million compared with cash generated from operating activities of $789.3 million in the prior-year quarter.

Guidance 2021

For 2021, Entergy still expects operational earnings of $5.80-$6.10 per share. The Zacks Consensus Estimate for the company’s earnings is currently pegged at $5.99 per share, which lies above the midpoint of the guided range.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

At this time, Entergy has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Entergy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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