Louisiana utility company Entergy Corp. (ETR) on Thursday provided preliminary earnings guidance for the third quarter significantly below analysts' expectations.
The company added that the expected decline in operational earnings for the third quarter is attributable to lower results at its public utility business, partially offset by increased earnings from its non-nuclear wholesale segment.
The company also reaffirmed its earnings forecast for the full year 2009. Entergy is scheduled to report financial results for the third quarter on October 22, 2009.
The New Orleans power generator said it anticipates third quarter reported earnings of about $2.31 per share and operational earnings of about $2.39 per share, excluding a special item at Entergy Nuclear for spin-off disruptions.
On average, 9 analysts polled by Thomson Reuters expect the company to report earnings of $2.57 per share for the third quarter. Analysts' estimate typically excludes one-time items.
In the year-ago third quarter, Entergy reported earnings of $2.41 per share and operational results of $2.50 per share, excluding special items. in quarter 2008.
The company noted that the expected decline in operational earnings for the third quarter 2009 is attributable to lower results at Utility, Parent and Other segment. This was partially offset by an increased in earnings at Non-nuclear Wholesale Assets segment. Entergy Nuclear segment also also reported modestly higher results compared to the third quarter 2008.
The third quarter operational earnings at Entergy's utility, parent & other segment are anticipated to be lower due to higher operation and maintenance expense as well as lower income tax expense in the year-ago quarter, due to the liquidation of a subsidiary which resulted in a tax loss on the company's investment. These were partially offset by higher net revenue and other income. Segment revenues in 2008 for the segment were negatively impacted by the effects of hurricanes Gustav and Ike.
However, third quarter operational earnings at Entergy Non-Nuclear Wholesale Assets segment are seen to improve due to the absence of the 2008 adjustment increasing income tax expense, which was associated with the redemption of an investment.
The operational earnings at Entergy Nuclear segment are also expected to be higher, boosted by higher revenues due to fewer planned and unplanned outages and increased other income. These were largely offset by increased operations and maintenance expense as well as the absence of the 2008 adjustment reducing income tax expense, which was associated with Massachusetts state tax law change.
Additionally, Entergy also reaffirmed fiscal 2009 its reported earnings guidance in the range of $6.00 to $6.60 per share, and operational earnings forecast in the range of $6.20 to $6.80 per share. Thirteen Wall Street analysts have a consensus earnings estimate of $6.52 per share for the full year 2009.
While reporting financial results for the second quarter back in August, Entergy affirmed its earnings outlook for fiscal year 2009, which it lowered in July citing recognition of additional decommissioning trust impairments in addition to further decline in power prices for Entergy Nuclear's open position.
Entergy reported in August a 16% decline in profit for the second quarter from last year, hurt by lower production at its nuclear segment due to additional refueling and unplanned outages in addition to a significant impairment on certain decommissioning trust fund investments. Net income declined to $226.81 million or $1.14 per share from $270.95 million or $1.37 per share in the prior-year quarter. On an operational basis, net income was $244.0 million or $1.23 per share, down from $289.2 million or $1.46 per share in the year-ago quarter. Total quarterly operating revenues declined 22.8% to $2.52 billion from $3.26 billion in the same quarter last year.
Among Entergy's peers, Columbus, Ohio-based American Electric Power Co., Inc. (AEP) is expected by analysts to report earnings of $0.84 per share for the third quarter, on revenues of $4.23 billion. The company is scheduled to report financial results for the third quarter on October 29, 2009.
Houston, Texas-based Centerpoint Energy, Inc. (CNP) is slated to report its financial results for the third quarter on October 22, 2009. Analysts expect the company to report earnings of $0.30 per share for the third quarter, on revenues of $1.59 billion.
ETR closed Wednesday's regular trading session at $78.82, down $0.52 on a volume of 1.06 million shares, lower than the three-month average volume of 1.22 million shares. In the past 52-week period, the stock has been trading in a range of $59.87 to $87.71.
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