Entergy Corp. (ETR) swung to a first-quarter loss as lower
revenue, unfavorable weather and prices, and several special
charges weakened the bottom line.
Last week, the merchant power and utility company warned of
weaker first-quarter earnings and lowered its full-year profit
guidance, pointing to unfavorable weather, along with updated
pension assumption and lower market energy prices.
Entergy 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.
Entergy reported a loss of $151.7 million, or 86 cents a share,
compared with a year-earlier profit of $248.7 million, or $1.38 a
share. Excluding special items in the latest quarter, earnings were
44 cents.
The company last week said it expected operating earnings of 43
cents, well below estimates at the time, saying the period would
include charges for impairments at the Vermont Yankee nuclear plant
and expenses tied to the proposed spinoff and merger of its
electric transmission business.
Revenue shrank 6.2% to $2.38 billion. Analysts polled by Thomson
Reuters most recently projected $2.5 billion.
Operating margin swung to negative 2.4% from positive 20.1%.
Earnings at its utilities business fell 62% to $62.9 million,
caused by about $46 million in higher taxes from a write-off. The
wholesale commodities segment posted a loss of $168.5 million,
compared with year-earlier earnings of $122.6 million. The company
said the bottom line at both segment fell due in part to weaker
revenues and higher non-fuel operation and maintenance expense.
Total electricity sales volumes fell 4.1% as residential sales
dropped 14%. Wholesale volume was down 23%.
Shares of Entergy, which affirmed its full-year earnings view,
closed Wednesday at $65.76 and were inactive premarket. The stock
is down 10% this year.
-By Ben Fox Rubin, Dow Jones Newswires; 212-416-3108;
ben.rubin@dowjones.com