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Entergy Earnings Meet Expectation, Up Y/Y

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Before the bell, Entergy Corporation (ETR - Free Report) reported first quarter 2013 results. In the reported quarter, the company posted operational earnings of 94 cents per share that came at par with the Zacks Consensus Estimate and above the company’s preliminary expectation. The reported figure climbed significantly from the year-ago quarter’s profit of 44 cents.

The higher numbers mainly came from an improved performance at Utility and Entergy Wholesale Commodities.

Operational Results

Revenue in the reported quarter boosted 9.4% year over year to $2,608.9 million. The top line, however, fell short of the Zacks Consensus Estimate of $2,625.0 million.

Of this Electricity revenue was up 9.2% to $1,949.3 million, Natural Gas increased almost 16% to $53.3 million, and Competitive Business revenue was up 9.7% to $606.3 million.

Segment Results


Utility's quarterly earnings were $123.5 million on an as-reported basis and $129.8 million on an operational basis, compared with $62.9 million on as-reported and $68.7 million on operational bases in the first quarter 2012. The year-over-year increase was largely due to lower income tax expense.

The reduction in income tax expense was associated with Entergy's write-off of an Entergy Gulf States Louisiana regulatory asset in first quarter 2012.

Entergy Wholesale Commodities

Entergy Wholesale Commodities’ as-reported and operational earnings were $82.1 million for first quarter 2013, compared with a loss of $175.9 million for first quarter 2012. The swing to profit was attributable to higher net revenue from the nuclear portfolio on higher energy and capacity prices.

Parent & Other

Parent & Other segment widened its loss in the reported quarter as numerous individually insignificant items affected results. The unit reported a loss of $44.2 million on both as-reported basis and an operational basis for first quarter 2013. This compares to a loss of $38.6 million on an as-reported basis and $37.2 million on an operational basis in the first quarter 2012.

Financial Condition

The company generated $544.0 million net cash from operating activities compared with $601.0 million in the first quarter 2012. Cash and cash equivalents at the end of the reported period were $263.0 million versus $685 million at year-end 2012. Long-term debt increased to $13,471 million from $12,619.0 million at year-end 2012.


Entergy maintained its 2013 earnings guidance in the range of $4.60 to $5.40 per share on an operational basis. However, the company revised its as-reported earnings assumption to $4.56 to $5.36 per share from $4.60 to $5.40 per share earlier, reflecting expenses related to the proposed spin-off and merger of the transmission business with ITC Holdings Corporation .

Zacks Rank

Entergy − the second largest U.S. nuclear power generator after Exelon Corporation (EXC - Free Report) − has a Zacks Rank #3 (Hold). However, we would advise investors to focus on Zacks Rank #1 (Strong Buy) Brookfield Infrastructure Partners L.P. (BIP - Free Report) .

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