Power firm Entergy Corp. (ETR) Thursday said it expects fourth-quarter earnings to improve from the year-ago period, helped by better performance at its Utility, Parent & Other segment. The company also reaffirmed its 2010 earnings forecast.
Entergy expects fourth-quarter 2009 as-reported earnings of $1.63 per share. In the fourth quarter of 2008, the company's as-reported earnings were $0.89 per share.
According to the company, as-reported earnings in the fourth quarter of 2009 include a special item at Entergy Nuclear. At Utility, Parent & Other, fourth-quarter results in both 2008 and 2009 include a special item for expenses for outside services to pursue the non-utility nuclear spin-off. In addition, each business reflects a special item in 2008 for the effects of the unsuccessful remarketing of the equity units in February 2009.
Operational earnings, which excludes special items, for the quarter are expected to be $1.74 per share. In the previous year, operational earnings stood at $0.99 per share. The company attributed the increase to higher results at Utility, Parent & Other, although partially offset by lower earnings at Entergy Nuclear. Non-Nuclear Wholesale Assets business' earnings also improved over fourth quarter 2008, Entergy added.
On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $1.40 per share for the quarter.
At Utility, Parent & Other, operational earnings in the fourth quarter of 2009 were higher mainly because of lower income tax expense, as well as lower non-fuel operation and maintenance expense, owing to the absence of last year's regulatory charges associated with rate proceedings at Entergy Arkansas, Inc. Also contributing to the earnings improvement was higher Utility net revenue, including increased sales volume for all customer classes. Weather during the quarter was near normal.
At Entergy Nuclear, the quarter-over-quarter decrease in operational earnings was primarily due to higher income tax and non-fuel operation and maintenance expense. These lower results were partially offset by higher net revenue, driven by both pricing and generation.
Increased generation stemmed from the absence of scheduled refueling outages in the fall of 2009, compared to 32 days of scheduled refueling outages in fourth quarter 2008. Higher other income associated with the decommissioning trusts also served as a partial offset to decreased earnings.
At Entergy's Non-Nuclear Wholesale Assets business, earnings increased during the quarter due primarily to lower income tax expense.
On an overall company basis, the fourth quarter 2009 effective tax rate was comparable to the previous year.
Further, the company affirmed its previously issued 2010 earnings guidance ranges of $6.15-$6.95 per share in as-reported earnings and $6.40-$7.20 per share in operational earnings. Analysts estimate earnings of $6.69 per share for the year.
ETR closed Wednesday's regular trade at $81.06, down from the previous close of $82.16, on 1.26 million shares.
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