Tuesday, March 19, 2019

Entergy Beats Expectations with $66M Loss

By Tom Kleckner

Entergy last week reported a fourth-quarter loss of $66 million ($0.36/share), beating analysts’ expectations by 12 cents. That compared favorably with a $479 million loss for the fourth quarter in 2017 ($2.66/share).

Five analysts surveyed by Zacks Investment Research had projected a loss of 48 cents/share.

For the year, Entergy reported earnings of $849 million ($4.63/share), compared to $412 million ($2.28/share) in 2017.

In a Feb. 20 conference call with financial analysts, Entergy CEO Leo Denault said 2018 was “another successful year” and said the company is “on track” to achieve its long-term goals.

The company said its results reflected asset impairments and other expenses related to its decision to exit its Entergy Wholesale Commodities business and its four aging nuclear plants. The New Orleans-based company completed the sale of Vermont Yankee and announced agreements to sell Pilgrim and Palisades. (See Entergy Sees Quicker Exit from Pilgrim, Palisades Nukes.)

Denault said Entergy is making progress on Pilgrim’s sale to Holtec and is “actively working” toward a post shutdown sale of New York’s Indian Point plant. Pilgrim will be shut down no later than May 31.

“We executed on our strategy and met major milestones in our transition to a pure-play utility. We expect 2019 will be no different,” Denault said.

The company’s stock price gained $3.67 after opening at $89.10 on Feb. 20, closing the week at $92.77. Entergy’s stock price is up 7.8% this year through Feb. 22, slightly above the 7.3% gain by the S&P 500 Utilities index.

OGE Earnings Slip, but Beat Expectations

OGE’s quarterly performance nevertheless beat Zacks’ consensus estimate of 24 cents/share. The Oklahoma City-based company reported a fourth-quarter net income of $54.7 million, down from $295 million the year prior when it enjoyed a $198 million windfall, thanks to the 2017 Tax Cuts and Jobs Act.

OGE CEO Sean Trauschke told financial analysts during a Feb. 21 conference call that 2018 “may well be regarded as the best [operational] year in our company’s history.”

Trauschke pointed to strong safety numbers, the addition to its fleet of the 462-MW Mustang Energy Center and its seven gas-fired generators, the commissioning of a 10-MW solar farm, the addition of scrubbers at its two coal-fired Sooner Power Plant units, and the conversion to natural gas of two coal units at its Muskogee Power Plant.

Wall Street reacted favorably to OGE’s report. The company’s share price was up 2.2% following its open Feb. 21, gaining 94 cents to close the week at $42.78.

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