Zacks_Analysts' Blog : Entergy Guides In Line, Misses Y/Y - Analyst Blog

Integrated energy company Entergy Corporation (ETR) provided fourth-quarter 2011 preliminary earnings expectation of 86 cents per share on a reported basis and operational earnings of nearly 93 cents per share.

Entergy is slated to release its fourth-quarter 2011 numbers on January 31, 2012. The guidance of the company is 2 cents higher than the Zacks Consensus expectation of 91 cents per share. The guidance reflects a 39-cent decrease from the year-ago quarterly earnings of $1.30 on an operational basis. On a reported basis the company clocked earnings of $1.26 in the year-ago quarter.

The expected year-over-year fall in operating performance for the fourth quarter of 2011 is attributable to lower results at Parent & Other segment. This will be partly countered by higher earnings at Utility and Entergy Wholesale Commodities.

Segment Details

Utility

The increase in Utility fourth quarter 2011 earnings was driven by a decrease in income tax expense. Utility net revenue was not a significant driver quarter-over-quarter, with a negative weather effect essentially offsetting other price and volume variances. Weather was mild in the fourth quarter 2011 compared to cooler-than-normal weather last year.

Entergy Wholesale Commodities

The quarter-over-quarter increase in operational earnings at Entergy Wholesale Commodities was driven by a lower effective income tax rate. Also contributing to the higher results was a reduction in the decommissioning liability to reflect an updated decommissioning study finalized in the fourth quarter of 2011. Partially offsetting these positive items was the absence of a gain on a sale of a plant sold in December 2010 and lower net revenue.

Parent & Other

Parent & Other's operational results were lower for the quarter due primarily to an increase in income tax expense.

Fiscal 2012 Guidance

Entergy reaffirmed its full fiscal 2012 operational earnings guidance in the range of $5.40 to $6.20 per share. The Zacks Consensus expectation for the same currently stands at $5.86 per share.

New Orleans, Louisiana based Entergy 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, and it is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas.

Entergy Corporation currently retains a Zacks #3 Rank (short-term Hold rating). The company competes with American Electric Power Company Inc. (AEP), CenterPoint Energy Inc. (CNP) and Southern Company (SO).