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Entergy (ETR) Up 3.5% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Entergy (ETR - Free Report) . Shares have added about 3.5% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Entergy's Q3 Earnings Beat Estimates, 2018 View Up

Entergy Corporation reported third-quarter 2018 adjusted earnings of $3.77 per share, which surpassed the Zacks Consensus Estimate of $2.83 by 33.2%. Moreover, the reported figure increased 60.4% from $2.35 in the year-ago quarter.

Excluding the effects of special items, the company’s GAAP earnings came in at $2.92 per share compared with $2.21 a year ago.

Total Revenues

In the quarter under review, Entergy reported total revenues of $3,104.3 million, surpassing the Zacks Consensus Estimate of $2,847 by 9%. However, it fell 4.3% from the year-ago quarter’s $3,244 million.

Segment Results

Utility: The segment’s quarterly adjusted earnings were $2.75 per share compared with $2.22 in the prior-year quarter.

Parent & Other: The segment incurred adjusted loss of 40 cents per share against loss of 32 cents in the prior-year quarter.

Entergy Wholesale Commodities (EWC): The segment reported adjusted earnings of $1.42 per share compared with 45 cents in the year-ago quarter.

Highlights of the Release

Operating expenses in the quarter were $2.83 billion, up 14% from $2.48 billion in the year-ago quarter.

Interest expenses were $195.3 million, up 17% from $166.9 million in the year-ago quarter.

In the reported quarter, total retail customers served by the company increased 0.5% to nearly 2.9 million.

Financial Highlights

As of Sep 30, 2018, the company had cash and cash equivalents of $988 million compared with $781 million as of Dec 31, 2017.

At the end of third quarter, the company generated cash from operating activities of $779.5 million, down from $893.1 million in the prior-year quarter.

Guidance

For 2018, Entergy increased its operational earnings guidance in a band of $6.75-$7.25 per share compared with its prior guidance of $6.25-$6.85.

Utility, and Parent & Other adjusted earnings have been reaffirmed to be $4.50-$4.90 per share.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted -12% due to these changes.

VGM Scores

Currently, Entergy has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. 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 this revision indicates a downward shift. It comes with little surprise Entergy has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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