Entergy Corp. (ETR), dealing in electric power production and retail electric distribution, Tuesday reported higher profit for the fourth quarter, helped by a profit at its Utility, Parent & Other division as well as lower expenses. Looking ahead, the company affirmed its 2010 earnings guidance.
The company reported fourth-quarter net income attributable to Entergy of $313.78 million, or $1.64 per share, higher than $170.6 million, or $0.89 per share for fourth quarter 2008.
On an operational basis, Entergy's fourth quarter 2009 earnings increased to $334.9 million, or $1.75 per share, from $190.7 million, or $0.99 per share in the fourth quarter 2008. On average, 14 analysts polled by Thomson Reuters expected earnings of $1.55 per share. Analysts' estimates typically exclude special items.
The power firm had said last month that it expected fourth-quarter earnings to improve from the year-ago period, helped by better performance at its Utility, Parent & Other segment.
The company's third quarter as-reported earnings were $455.2 million or $2.32 per share.
Total operating revenues declined 16.7% in the quarter to $2.499 billion from $3.001 billion in the prior year. Wall Street expected revenues of $3.71 billion. In the third quarter the company had recorded total operating revenues of $2.94 billion.
Fourth-quarter electric revenues dropped 24.2% to $1.739 billion, while Natural gas revenues slipped 19.8% to $45.30 million. In Competitive businesses, fourth-quarter revenues advanced 9.8% to $714.16 million.
Operating income for the latest period increased to $503.20 million from $356.73 million in the prior year.
In Utility, Parent & Other, fourth-quarter as-reported earnings were $107.0 million, or $0.56 per share, compared to a loss of $82.6 million, or 38 cents per share, in fourth quarter 2008.
On an operational basis, Utility, Parent & Other's results were higher due to lower income tax expense, lower non-fuel operation and maintenance expense and higher net revenue.
Residential sales on a weather-adjusted basis increased 4.6% from the previous year, while Commercial and governmental sales, on a weather-adjusted basis, increased 3% year-over-year. Industrial sales in the fourth quarter increased 7.1%, compared to the same quarter of 2008.
In the just concluded quarter, Entergy Nuclear earned $169.5 million, or $0.89 per share, on an as-reported basis, down from $226.6 million, or $1.14 per share, in the fourth quarter of 2008. The segment's operational earnings decreased due to higher income tax and non-fuel operation and maintenance expenses, partially offset by higher net revenue and other income.
Entergy's Non-Nuclear Wholesale Assets business earned $37.2 million, or $0.19 per share in the latest period, compared to $26.5 million, or $0.13 per share last year. The results improved due to lower income tax expense.
Total operating expenses dropped to $1.995 billion from last year's $2.644 billion as Fuel, fuel-related expenses, and gas purchased for resale dropped 63.3% to $382.14 million.
For the full year, Entergy's earnings were $1.2 billion, or $6.30 per share, compared with $1.2 billion, or $6.20 per share in the previous year. Operational earnings for the year were $1.3 billion, or $6.67 per share, in comparison with $1.3 billion, or $6.51 per share in 2008. Operating revenues for the period declined to $10.746 billion from $13.094 billion reported last year. The Street expected full-year earnings of $6.47 per share on revenues of $12.36 billion.
Entergy is spinning off of its non-utility nuclear business, which will establish a new independent, publicly traded company, Enexus Energy Corp. Entergy and Enexus intend to enter into a nuclear services joint venture, with equal ownership, with the joint venture being named EquaGen LLC. The Nuclear Regulatory Commission has agreed to extend the expiration date for the spin-off approval to August 1.
Looking ahead, the company affirmed its 2010 earnings guidance of $6.15-$6.95 per share. Excluding $0.25 per share of projected dis-synergies associated with the spin-off and plans to enter into a nuclear services joint venture, operational earnings per share guidance ranges from $6.40 to $7.20 per share. Wall Street expects 2010 earnings of $6.35-$6.96 per share with a consensus of $6.70 per share.
Wayne Leonard, Entergy's chairman and chief executive officer, said, "Looking ahead, signs of an improving economic environment, our market-based point-of-view, adherence to our disciplined risk management and the strength of our cash position provide a foundation that supports our strategic, operational and financial goals." Among peers, American Electric Power Co., Inc. (AEP) last month reported a 57% year-over-year surge in profit for the fourth quarter, helped by rate increases across its service area, cost cutting as well as revenue growth, partially offset by weak industrial demand amid the economic downturn.
Exelon Corp. (EXC) said last month that profit dropped 18% in the fourth quarter, as demand for electricity remained weak amid the recession.
ETR is currently trading at $76.76, down $0.43 or 0.52%, on 166,861 shares.
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