New Orleans-based Entergy expects Q3 as-reported, operational earnings of US$3.52/share, compared with US$2.62/share in Q3 2010, driven by higher earnings in utility segment
October 18, 2011
– Entergy Corporation (NYSE: ETR) today indicated that it expects third quarter 2011 as-reported and operational earnings of approximately $3.52 per share. Results for third quarter 2010 were $2.62 per share on an as-reported basis and $2.76 per share on an operational basis. Entergy also updated its earnings guidance for 2011 to be in the range of $7.15 to $7.65 per share.
As-reported results are prepared in accordance with generally accepted accounting principles and are comprised of operational earnings (described below) and special items. The special item, reflected in third quarter 2010 as-reported results for Entergy Wholesale Commodities, was associated with the previously planned spin-off of the non-utility nuclear business.
The third quarter 2011 earnings improvement was due to higher earnings at Utility, partially offset by lower results at Entergy Wholesale Commodities and Parent & Other. Third quarter 2011 earnings also reflect accretion from Entergy's share repurchase programs.
The increase in Utility third quarter 2011 earnings was driven by a tax settlement that resulted in a significant decrease in income tax expense during the current quarter, the majority of which was reflected at the Utility. A portion of the resulting benefits will be shared with Entergy Louisiana, LLC's customers, consistent with the settlement approved by the Louisiana Public Service Commission in October 2011. As a result, the decrease in income tax expense was partially offset by a regulatory charge reducing Utility net revenue to reflect the customer sharing arrangement.
Excluding this regulatory charge, Utility net revenue was modestly lower. Favorable weather in the third quarter 2011 essentially matched the significantly warmer-than-normal weather effect experienced one year ago. Also contributing to the improved Utility results was lower non-fuel operation and maintenance expense. An increase in depreciation and amortization expense partially offset these factors.
Entergy Wholesale Commodities
The quarter-over-quarter decrease in operational earnings at Entergy Wholesale Commodities was driven by lower net revenue and a higher effective income tax rate, partially offset by a reduction in non-fuel operation and maintenance expense. EWC's net revenue declined due primarily to lower pricing associated with the nuclear fleet. Providing a partial offset in net revenue was an increase in nuclear generation due to fewer planned and unplanned outages. The J.A. FitzPatrick plant had 18 refueling days in September 2010 compared to no scheduled refueling outages in the current quarter.
Parent & Other
Parent & Other's results were lower for the quarter due primarily to the absence of a 2010 adjustment reducing income tax expense (associated with a favorable Tax Court ruling).
As a result of the Internal Revenue Service and LPSC settlements discussed above, Entergy revised its 2011 as-reported and operational earnings guidance to a range of $7.15 to $7.65 per share. Entergy's previous guidance range was $6.35 to $6.85 per share on both an as-reported basis and operational basis.
A teleconference will be held at 10 a.m. CT on Tuesday, Nov. 1, 2011, to discuss Entergy's third quarter 2011 earnings announcement, and may be accessed by dialing (719) 457-2080, confirmation code 4650540, no more than 15 minutes prior to the start of the call. The call and presentation slides can also be accessed via Entergy's website at www.entergy.com. A replay of the teleconference will be available for seven days thereafter by dialing (719) 457-0820, confirmation code 4650540.
Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of more than $11 billion and approximately 15,000 employees.
Additional investor information can be accessed online at www.entergy.com/investor_relations.