Entergy Corporation (NYSE: ETR) today indicated that it expects first quarter 2014 as-reported earnings of approximately $2.23 per share and operational earnings of approximately $2.28 per share. Results for first quarter 2013 were $0.90 per share on an as-reported basis and $0.94 per share on an operational basis. Strong first quarter 2014 earnings resulted from significantly higher realized wholesale energy prices at Entergy Wholesale Commodities, reflecting cold winter weather and northeast pipeline infrastructure limitations, which reinforces the need for a diverse generation portfolio and the value of existing nuclear generation facilities in the region. The Utility also saw higher earnings on colder-than-normal temperatures. Entergy also raised its 2014 operational earnings guidance to be in the range of $5.55 to $6.75 per share.
As-reported results are prepared in accordance with generally accepted accounting
principles and are comprised of operational earnings and special items. Special items in first quarter
2014 were recorded arising from the decision to close the Vermont Yankee Nuclear Power Station
later this year and the human capital management strategic imperative. First quarter 2013 included a
special item for the proposed transmission spin-merge transaction.
The increase in first quarter 2014 earnings was driven by higher results at Entergy
Wholesale Commodities and Utility. On a consolidated basis, the preliminary estimate for the
effective income tax rate was approximately 35 percent in first quarter 2014.
Entergy Wholesale Commodities
Significantly higher realized wholesale energy prices were the biggest factor driving the
quarter-over-quarter increase in operational earnings at Entergy Wholesale Commodities. EWC’s
hedging strategies routinely include financial instruments that balance operational and liquidity risk
through participation in rising power price markets. These positions, in addition to a larger-than normal
unhedged position in 2014 due to Vermont Yankee being in its final operating year, allowed
EWC to benefit from the increases in northeast market power prices throughout the quarter. Along
with the realization of these positions, revenues also reflected the turnaround of the negative market-to-
market loss recorded in fourth quarter 2013 associated with certain transactions.
A lower effective income tax rate was another factor contributing to higher quarterly
earnings. These items were partially offset by higher depreciation expense following the finalization
of a new depreciation rate study.
Utility
The increase in Utility first quarter 2014 operational earnings was due primarily to higher
net revenue reflecting higher sales volume, primarily weather. The weather effect was
approximately $0.18 per share in first quarter 2014, compared to unfavorable weather of negative
$(0.10) per share in the comparable period. In addition, non-fuel operation and maintenance
expense was lower.
Earnings Guidance
As a result of higher northeast spot and forward prices and market volatility at EWC and
favorable weather at the Utility in the first quarter, Entergy raised its 2014 operational earnings
guidance and widened the range to be $5.55 to $6.75 per share. Entergy had previously noted that,
based on assumptions as of Dec. 31, 2013, indications were near the upper end of the prior $4.60 to
$5.40 per share guidance range.
Earnings Results Schedule
Entergy will report first quarter earnings results before the market opens on Thursday, April
24, 2014, and host a teleconference at 10 a.m. CT that day to discuss the earnings announcement
and the company’s financial performance. The teleconference may be accessed by dialing (719)
325-2115, confirmation code 6761108, no more than 15 minutes prior to the start of the call or by
visiting Entergy’s website at www.entergy.com. The presentation slides also will be available on
Entergy’s website before the market opens on the day of the call. A replay of the teleconference will
be available for seven days thereafter by dialing (719) 457-0820, confirmation code 6761108.
Entergy Corporation is an integrated energy company engaged primarily in electric power
production and retail distribution operations. Entergy owns and operates power plants with
approximately 30,000 megawatts of electric generating capacity, including more than 10,000
megawatts of nuclear power, making it one of the nation’s leading nuclear generators. Entergy
delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas.
Entergy has annual revenues of more than $11 billion and approximately 14,000 employees.
Source: Entergy 4.15.2014