Entergy Corporation (ETR) posted third-quarter 2014 operational earnings of $1.68 per share, in line with the Zacks Consensus Estimate. However, the reported number was down from earnings of $2.41 in the year-ago period. Quarterly earnings decreased 30.3% on a year-over-year basis primarily due to a decline in earnings at the Utility, Entergy Wholesale Commodities and Parent and Other segment.
Excluding special items of 41 cents, the company’s quarterly GAAP earnings were $1.27 per share compared with the year-ago figure of $1.34.
Operational Results
In the quarter under review, Entergy’s total operating revenues of $3,458.1 million surpassed the Zacks Consensus Estimate by 8.6%. Reported revenues also increased 3.2% year over year primarily due to the improvement in Electric (4.4% year over year) and Natural Gas (7.4%) sales.
Segment Results
Utility: The segment’s quarterly earnings were $310.9 million on a reported basis and $311.2 million on an operational basis compared with $348.0 million on a reported basis and $363.3 million on an operational basis in third-quarter 2013. The year-over-year decrease was largely due to a regulatory charge at Entergy Mississippi Inc. and higher operations and maintenance expenses.
Entergy Wholesale Commodities (EWC): Entergy Wholesale Commodities' losses were $33.2 million on a reported basis while operational earnings were $40.8 million for third-quarter 2014. During the corresponding quarter last year, losses were $92.8 million on a reported basis and earnings on an operational basis were $82.3 million, respectively. The decline was primarily due to a rise in the effective income tax rate and depreciation expenses.
Parent & Other: In the reported quarter, the unit incurred a loss of $47.7 million on both reported and operational basis. This compares to a loss of $15.3 million on a reported and operational basis in the year-ago quarter. The decline is attributable to the increasing income tax expense.
Financial Condition
As of Sep 30, 2014, Entergy’s total cash and cash equivalents were $1,068.5 million compared with $739.1 million as of Dec 31, 2013.
Long-term debt as of Sep 30, 2014 totaled $11.6 billion versus $12.1 billion as of Dec 31, 2013.
Total operating cash flow in the reported quarter was $1,363 million versus $1,084 million in the year-ago comparable period.
Entergy’s capital expenditure was $547 million in the third quarter compared with $536.3 million a year ago.
Guidance
Entergy has maintained its 2014 earnings guidance in the range of $5.55–$6.75 per share on an operational basis.
Zacks Rank
Entergy currently has a Zacks Rank #3 (Hold).
Other Peer Releases
Consolidated Edison, Inc. (ED) is slated to report its third-quarter results on Nov 6 after the closing bell. The Zacks Consensus Estimate stands at $1.43 per share.
Duke Energy Corp. (DUK) is slated to report its third-quarter results on Nov 5 before the opening bell. The Zacks Consensus Estimate stands at $1.52 per share.
Dynegy Inc. (DYN) is slated to report its third-quarter results on Nov 5 after the closing bell. The Zacks Consensus Estimate stands at 5 cents per share.
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