Entergy Q2: Misses by a Sliver

| About: Entergy Corporation (ETR)

Entergy Corporation (ETR) - (Analyst Report) announced fiscal second-quarter EPS of $1.23 that was just a cent short of the Zacks Consensus Estimate of $1.24. However year-over-year EPS fell 23 cents, the pain came from higher refueling and outages (both planned and unplanned) at its nuclear power plants.

New Orleans-based Entergy is primarily engaged in electric power production and retail distribution operations. The company owns and operates power plants with approximately 30,000MW of electricity generating capacity. Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas.

The company with a cumulative capacity of 8,000MW is the second largest nuclear power generator in the U.S. Entergy operates through five subsidiaries: Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi and Entergy New Orleans.

Entergy’s revenues fell 22.8% year over year to $2.5 billion in the quarter with Electricity (down 24%), Natural Gas (down 46.6%), and Competitive businesses (down 16.4%). Electricity revenue of Entergy in-line with the industry trend was affected most with the industrial customers. Entergy’s volume sales to industrial customers fell 9.7%, while overall volume loss was 5.9% in the quarter.

However, the company was able to improve upon the overall headcount of customers year over year by 0.7%, barring the industrial customers, which shrunk by 3.4%. With the economy in doldrums, Entergy’s industry peers reporting on Tuesday – Allegheny Energy (AYE - Analyst Report) and Duke Energy Company (DUK - Snapshot Report) also shared the industrial customer downslide.

Entergy revised its fiscal 2009 EPS guidance on account of an expected slide in power prices and charges related to the planned spin-off of its non-utility nuclear business into a separate company, Enexus Energy Corporation. GAAP EPS estimate for the fiscal now stands at $6.00 – $6.60 and operational EPS estimate at $6.20 – $6.80. This is in-line with the Zacks Consensus Estimate of $6.57 for the fiscal year.

We currently rate Entergy shares as Neutral, expecting the stock to perform in-line with the broader market.