Entergy Corp. (ETR) projected disappointing first-quarter
earnings and lowered its profit guidance for the year, pointing to
unfavorable weather, along with updated pension assumptions and
lower market energy prices.
For the first quarter, the merchant power and utility company
projected operating earnings of about 43 cents a share, versus the
estimate of $1.14 from analysts polled by Thomson Reuters. The
period includes charges for impairments at the Vermont Yankee
nuclear plant and expenses tied to the proposed spinoff and merger
of its electric transmission business.
At Entergy's utility segment, it expects a quarter-over-quarter
decrease in operational earnings on higher income tax expense and
lower net revenue tied to unfavorable weather.
Meanwhile at the wholesale commodities segment, earnings were
below the prior-year period largely due to lower net revenue on
lower pricing associated with the nuclear fleet.
Entergy now expects earnings of $4.85 to $5.65 a share for the
year, down from its November view of $5.40 to $6.20, and charges of
$1.30 a share.
The company in December unveiled plans to spin off its electric
transmission business and merge the operation with ITC Holdings
Corp. (ITC). The deal is expected to allow Entergy to reduce its
debt and focus on its utilities in four states and its fleet of
nuclear power plants, which are expected to require substantial
investments over the next several years. The company remains in
legal disputes over its Vermont and New York nuclear power plants'
operations.
In January, Entergy reported its fourth-quarter earnings fell
31% due to a prior-year gain and as the company reported lower
revenue as milder weather reduced electricity demand.
Shares were inactive premarket and closed Wednesday at $66.27.
The stock is off 9.3% this year.
-By Lauren Pollock, Dow Jones Newswires; 212-416-2356;
lauren.pollock@dowjones.com