Friday, Entergy Corp. (ETR), issued earnings guidance for the year 2010 assuming a business as usual operation for the full year, as well as post-spin financial outlooks for Entergy and Enexus Energy Corp. In addition, Entergy outlined its preliminary three-year capital expenditure plan for the period 2010 through 2012.
According to the company, as the proposed spin-off date of Entergy's non-utility nuclear business is not yet known with certainty at this time, the company is initiating 2010 earnings guidance in the range of $6.40 to $7.20 per share on an operational basis, assuming a business as usual operation for the full year.
Entergy said that as-reported earnings per share guidance ranges from $6.15 to $6.95 and reflects $0.25 per share of projected dis-synergies associated with the spin-off and plans to enter into a nuclear services joint venture. Guidance for 2010 does not incorporate a special item for expenses, which were incurred beginning in 2008 and are expected to continue in 2010, anticipated in connection with outside services provided to pursue the spin-off. The level of these charges in 2010 will vary depending upon resolution of the spin-off.
On average, 15 analysts polled by Thomson Reuters estimate earnings per share of $6.77. Analyst's estimates typically exclude special items.
The company's preliminary capital plan from 2010 through 2012 anticipates $7.1 billion for investment, including $2.7 billion of maintenance capital. The remaining $4.4 billion is for specific investments, as well as other initiatives.
Entergy sees continued productive investment opportunity at the Utility in the coming years and aspires to fund its capital program without issuing equity, while maintaining a competitive capital return program. Given the financial profile of its vertically integrated utility operation, dividends are expected to be the primary form of return of capital, with the aspiration to retain its current dividend level even after the spin-off of a substantial business while balancing future growth thereon with competing investment opportunities.
"We continue to take the actions necessary to complete the planned non-utility nuclear spin-off," said J. Wayne Leonard, Entergy's chairman and chief executive officer. "With line of sight on ultimate resolution in 2010, the Entergy Board of Directors has granted authority for an additional $750 million share repurchase program, following completion of an initial $500 million authorization in third quarter 2009."
He added that while it is expected the additional share repurchases under the new authorization will occur following spin-off completion in the near-term, consistent with the $500 million authorization, the incremental $750 million of share repurchase capacity is supported by the underlying business operations whether or not the spin-off transaction is completed.
ETR closed Friday's last trade on the New York Stock Exchange at $76.72, down $1.83 or 2.33%.
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