Entergy reports third quarter earnings
Company narrows guidance range and updates longer-term outlooks
NEW ORLEANS, Oct. 31, 2024 /PRNewswire/ -- Entergy Corporation (NYSE:ETR) reported third quarter 2024 earnings per share of $2.99 on both an as-reported and an adjusted (non-GAAP) basis.
"We achieved outstanding results across operational, regulatory, resilience, and growth dimensions," said Drew Marsh, Entergy Chair and Chief Executive Officer. "These outcomes are the result of strong execution and leveraging a stakeholder engagement model that starts with the customer and ensures value is created for all stakeholders."
Business highlights included the following:
Entergy narrowed its 2024 adjusted EPS guidance range to $7.15 to $7.35 (pre-split) and updated longer-term outlooks.
E-LA filed for approval of significant new transmission and generation investment to support a new large customer.
E-MS announced plans to build its first new natural gas power station in 50 years.
E-AR's 100-megawatt Walnut Bend Solar was placed in service.
E-AR closed on West Memphis Solar and Driver Solar.
E-LA issued an RFP using its new streamlined process to acquire 3 gigawatts of solar resources.
The LPSC approved several items for E-LA including its FRP renewal, the gas LDC sale, the settlement with SERI to resolve all complaints against SERI (subject to FERC approval), and an agreement to divest E-LA's share of Grand Gulf energy and capacity to E-MS.
Filings submitted to the MPSC and FERC to divest E-LA's share of Grand Gulf energy and capacity to E-MS.
The CCNO approved $100 million of E-NO's resilience plan for investment over the next two years.
The PUCT approved an E-TX DCRF filing.
Entergy's Board of Directors declared a quarterly dividend of $1.20 per share, a six percent increase.
Entergy's Board of Directors approved a two-for-one stock split of Entergy's common stock, effective with trading starting December 13, 2024.
Entergy was named as one of the nation's top utilities in economic development by Site Selection magazine for the 17th consecutive year.
Consolidated earnings (GAAP and non-GAAP measures)
Third quarter and year-to-date 2024 vs. 2023 (See Appendix A for reconciliation of GAAP to non-GAAP measures and description of adjustments)
Third quarter
Year-to-date
2024
2023
Change
2024
2023
Change
(After-tax, $ in millions)
As-reported earnings
645
667
(22)
769
1,369
(600)
Less adjustments
-
(27)
27
(517)
42
(559)
Adjusted earnings (non-GAAP)
645
694
(49)
1,286
1,327
(41)
Estimated weather impact
41
135
(94)
70
103
(33)
(After-tax, per share in $)
As-reported earnings
2.99
3.14
(0.15)
3.58
6.45
(2.87)
Less adjustments
-
(0.13)
0.13
(2.41)
0.20
(2.61)
Adjusted earnings (non-GAAP)
2.99
3.27
(0.28)
5.99
6.25
(0.26)
Estimated weather impact
0.19
0.64
(0.45)
0.33
0.48
(0.16)
Calculations may differ due to rounding
Consolidated results
For third quarter 2024, the company reported earnings of $645 million, or $2.99 per share, on an as-reported basis and an adjusted basis. This compared to third quarter 2023 earnings of $667 million, or $3.14 per share, on an as-reported basis and $694 million, or $3.27 per share, on an adjusted basis.
Summary discussions of results by business follow. Additional details, including information on OCF by business, are provided in Appendix A. A more detailed analysis of variances by business is provided in Appendix B.
Business results
Utility
For third quarter 2024, the Utility business reported earnings attributable to Entergy Corporation of $787 million, or $3.65 per share, on an as-reported basis and an adjusted basis. This compared to third quarter 2023 earnings of $752 million, or $3.54 per share, on an as-reported basis and $810 million, or $3.82 per share, on an adjusted basis. There were several drivers for the third quarter as-reported increase.
In third quarter 2023, as a result of Entergy Arkansas' offer to forgo its opportunity to seek recovery of costs resulting from the March 2013 ANO stator incident, Entergy Arkansas recorded a write-off totaling $(78 million) ($(59 million) after tax). The write-off was considered an adjustment and excluded from adjusted earnings.
Other drivers for the increase included:
the net effect of regulatory actions across the operating companies,
higher other income (deductions) primarily due to a decrease in non-service pension costs, and
lower other O&M.
These drivers were partially offset by:
the effects of weather on retail volume,
higher depreciation expense, and
higher interest expense.
On a per share basis, third quarter 2024 results reflected higher diluted average number of common shares outstanding due to the settlement of equity forwards in fourth quarter 2023 under the company's ATM program, option exercises under the company's stock-based compensation plans, and the dilutive effect from unsettled equity forwards under the company's ATM program as a result of an increase in the stock price.
Appendix C contains additional details on Utility operating and financial measures.
Parent & Other
For third quarter 2024, Parent & Other reported a loss attributable to Entergy Corporation of $(142 million), or (66) cents per share, on an as-reported basis and an adjusted basis. This compared to a third quarter 2023 loss of $(85 million), or (40) cents per share, on an as-reported basis, and a loss of $(117 million), or (55) cents per share, on an adjusted basis.
Drivers for the third quarter variances included:
the effects of the third quarter 2023 DOE spent fuel litigation settlement related to IPEC on asset write-offs and impairments (considered an adjustment and excluded from adjusted earnings),
lower other income (deductions) due to lower non-service pension income and changes in legal provisions, and
higher interest expense.
On a per share basis, third quarter 2024 results reflected higher diluted average number of common shares outstanding (see drivers in Utility section).
Earnings per share guidance
Entergy announced a two-for-one forward stock split of Entergy's issued common stock. Each record holder of common stock as of the close of market on December 5, 2024, will receive one additional share of common stock for each then-held share, to be distributed after market close on December 12, 2024. Trading is expected to commence on a split-adjusted basis at market open on December 13, 2024.
Entergy narrowed its 2024 adjusted EPS guidance to a range of $7.15 to $7.35 (pre-split). See webcast presentation for additional details.
The company has provided 2024 earnings guidance with regard to the non-GAAP measure of adjusted earnings per share. This measure excludes from the corresponding GAAP financial measure the effect of adjustments as described below under "Non-GAAP financial measures." The company has not provided a reconciliation of such non-GAAP guidance to guidance presented on a GAAP basis because it cannot predict and quantify with a reasonable degree of confidence all of the adjustments that may occur during the period. Potential adjustments include the exclusion of regulatory charges related to outstanding regulatory complaints and significant income tax items.
Earnings teleconference
A teleconference will be held at 10:00 a.m. Central Time on Thursday, October 31, 2024, to discuss Entergy's quarterly earnings announcement and the company's financial performance. The teleconference may be accessed by visiting Entergy's website at investors.entergy.com/investors/events-and-presentations or by dialing 888-440-4149, conference ID 9024832, no more than 15 minutes prior to the start of the call. The webcast presentation is also being posted to Entergy's website concurrent with this news release. A replay of the teleconference will be available on Entergy's website at investors.entergy.com/investors/events-and-presentations and by telephone. The telephone replay will be available through November 7, 2024, by dialing 800-770-2030, conference ID 9024832.
Entergy is a Fortune 500 company that powers life for 3 million customers through our operating companies in Arkansas, Louisiana, Mississippi, and Texas. We're investing in the reliability, resilience and growth of the energy system while helping our region transition to cleaner, more efficient energy solutions. With roots in our communities for more than 100 years, Entergy is a nationally recognized leader in sustainability and corporate citizenship. Since 2018, we have delivered more than $100 million in economic benefits each year to local communities through philanthropy, volunteerism, and advocacy. Entergy is headquartered in New Orleans, Louisiana, and has approximately 12,000 employees.
Entergy Corporation's common stock is listed on the New York Stock Exchange and NYSE Chicago under the symbol "ETR".
Details regarding Entergy's results of operations, regulatory proceedings, and other matters are available in this earnings release, a copy of which will be filed with the SEC, and the webcast presentation. Both documents are available on Entergy's Investor Relations website at investors.entergy.com/investors/events-and-presentations.
Entergy maintains a web page as part of its Investor Relations website entitled Regulatory and other information, which provides investors with key updates on certain regulatory proceedings and important milestones on the execution of its strategy. While some of this information may be considered material information, investors should not rely exclusively on this page for all relevant company information.
For definitions of certain operating measures, as well as GAAP and non-GAAP financial measures and abbreviations and acronyms used in the earnings release materials, see Appendix E.
Non-GAAP financial measures
This news release contains non-GAAP financial measures, which are generally numerical measures of a company's performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Entergy has provided quantitative reconciliations within this news release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Entergy reports earnings using the non-GAAP measure of Entergy adjusted earnings, which excludes the effect of certain "adjustments." Adjustments are unusual or non-recurring items or events or other items or events that management believes do not reflect the ongoing business of Entergy, such as significant tax items, and other items such as certain costs, expenses, or other specified items. In addition to reporting GAAP earnings on a per share basis, Entergy reports its adjusted earnings on a per share basis. These per share measures represent the applicable earnings amount divided by the diluted average number of common shares outstanding for the period.
Management uses the non-GAAP financial measures of adjusted earnings and adjusted earnings per share for, among other things, financial planning and analysis; reporting financial results to the board of directors, employees, stockholders, analysts, and investors; and internal evaluation of financial performance. Entergy believes that these non-GAAP financial measures provide useful information to investors in evaluating the ongoing results of Entergy's business, comparing period to period results, and comparing Entergy's financial performance to the financial performance of other companies in the utility sector.
Other non-GAAP measures, including adjusted ROE; adjusted ROE, excluding affiliate preferred; FFO to adjusted debt; gross liquidity; net liquidity; adjusted Parent debt to total adjusted debt; adjusted debt to adjusted capitalization; and adjusted net debt to adjusted net capitalization are measures Entergy uses internally for management and board discussions and to gauge the overall strength of its business. Entergy believes the above data provides useful information to investors in evaluating Entergy's ongoing financial results and flexibility and assists investors in comparing Entergy's credit and liquidity to the credit and liquidity of others in the utility sector. These metrics are defined in Appendix E.
These non-GAAP financial measures reflect an additional way of viewing aspects of Entergy's operations that, when viewed with Entergy's GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting Entergy's business. These non-GAAP financial measures should not be used to the exclusion of GAAP financial measures. Investors are strongly encouraged to review Entergy's consolidated financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Although certain of these measures are intended to assist investors in comparing Entergy's performance to other companies in the utility sector, non-GAAP financial measures are not standardized; therefore, it might not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
Cautionary note regarding forward-looking statements
In this news release, and from time to time, Entergy Corporation makes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, among other things, statements regarding Entergy's 2024 earnings guidance; financial and operational outlooks; industrial load growth outlooks; statements regarding its climate transition and resilience plans, goals, beliefs, or expectations; and other statements of Entergy's plans, beliefs, or expectations included in this news release. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this news release. Except to the extent required by the federal securities laws, Entergy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Forward-looking statements are subject to a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including (a) those factors discussed elsewhere in this news release and in Entergy's most recent Annual Report on Form 10-K, any subsequent Quarterly Reports on Form 10-Q, and Entergy's other reports and filings made under the Securities Exchange Act of 1934; (b) uncertainties associated with (1) rate proceedings, formula rate plans, and other cost recovery mechanisms, including the risk that costs may not be recoverable to the extent or on the timeline anticipated by the utilities and (2) implementation of the ratemaking effects of changes in law; (c) uncertainties associated with (1) realizing the benefits of its resilience plan, including impacts of the frequency and intensity of future storms and storm paths, as well as the pace of project completion and (2) efforts to remediate the effects of major storms and recover related restoration costs; (d) risks associated with operating nuclear facilities, including plant relicensing, operating, and regulatory costs and risks; (e) changes in decommissioning trust values or earnings or in the timing or cost of decommissioning Entergy's nuclear plant sites; (f) legislative and regulatory actions and risks and uncertainties associated with claims or litigation by or against Entergy and its subsidiaries; (g) risks and uncertainties associated with executing on business strategies, including (1) strategic transactions that Entergy or its subsidiaries may undertake and the risk that any such transaction may not be completed as and when expected and the risk that the anticipated benefits of the transaction may not be realized, and (2) Entergy's ability to meet the rapidly growing demand for electricity, including from hyperscale data center and other large customers, and to manage the impacts of such growth on customers and Entergy's business; (h) direct and indirect impacts to Entergy or its customers from pandemics, terrorist attacks, geopolitical conflicts, cybersecurity threats, data security breaches, or other attempts to disrupt Entergy's business or operations, and/or other catastrophic events; and (i) effects on Entergy or its customers of (1) changes in federal, state, or local laws and regulations and other governmental actions or policies, including changes in monetary, fiscal, tax, environmental, or energy policies; (2) changes in commodity markets, capital markets, or economic conditions; and (3) technological change, including the costs, pace of development, and commercialization of new and emerging technologies.
Third quarter 2024 earnings release appendices and financial statements
Appendices
A: Consolidated results and adjustmentsB: Earnings variance analysisC: Utility operating and financial measuresD: Consolidated financial measuresE: Definitions and abbreviations and acronymsF: Other GAAP to non-GAAP reconciliations
Financial statements
Consolidating balance sheetsConsolidating income statementsConsolidated cash flow statements
A: Consolidated results and adjustmentsAppendix A-1 provides a comparative summary of consolidated earnings, including a reconciliation of as-reported earnings (GAAP) to adjusted earnings (non-GAAP).
Appendix A-1: Consolidated earnings - reconciliation of GAAP to non-GAAP measures
Third quarter and year-to-date 2024 vs. 2023 (See Appendix A-2 and Appendix A-3 for details on adjustments)
Third quarter
Year-to-date
2024
2023
Change
2024
2023
Change
(After-tax, $ in millions)
As-reported earnings (loss)
Utility
787
752
35
1,423
1,663
(240)
Parent & Other
(142)
(85)
(57)
(654)
(294)
(359)
Consolidated
645
667
(22)
769
1,369
(600)
Less adjustments
Utility
-
(59)
59
(267)
10
(277)
Parent & Other
-
32
(32)
(250)
32
(282)
Consolidated
-
(27)
27
(517)
42
(559)
Adjusted earnings (loss) (non-GAAP)
Utility
787
810
(24)
1,690
1,653
36
Parent & Other
(142)
(117)
(25)
(403)
(326)
(77)
Consolidated
645
694
(49)
1,286
1,327
(41)
Estimated weather impact
41
135
(94)
70
103
(33)
Diluted average number of common shares outstanding (in millions)
216
212
3
215
212
3
(After-tax, per share in $) (a)
As-reported earnings (loss)
Utility
3.65
3.54
0.11
6.63
7.84
(1.21)
Parent & Other
(0.66)
(0.40)
(0.26)
(3.04)
(1.39)
(1.66)
Consolidated
2.99
3.14
(0.15)
3.58
6.45
(2.87)
Less adjustments
Utility
-
(0.28)
0.28
(1.24)
0.05
(1.29)
Parent & Other
-
0.15
(0.15)
(1.17)
0.15
(1.32)
Consolidated
-
(0.13)
0.13
(2.41)
0.20
(2.61)
Adjusted earnings (loss) (non-GAAP)
Utility
3.65
3.82
(0.17)
7.87
7.79
0.08
Parent & Other
(0.66)
(0.55)
(0.11)
(1.88)
(1.54)
(0.34)
Consolidated
2.99
3.27
(0.28)
5.99
6.25
(0.26)
Estimated weather impact
0.19
0.64
(0.45)
0.33
0.48
(0.16)
Calculations may differ due to rounding
(a)
Per share amounts are calculated by dividing the corresponding earnings (loss) by the diluted average number of common shares outstanding for the period.
See Appendix B for detailed earnings variance analysis.
Appendix A-2 and Appendix A-3 detail adjustments by business. Adjustments are included in as-reported earnings consistent with GAAP but are excluded from adjusted earnings. As a result, adjusted earnings is considered a non-GAAP measure.
Appendix A-2: Adjustments by driver (shown as positive/(negative) impact on earnings or EPS)
Third quarter and year-to-date 2024 vs. 2023
Third quarter
Year-to-date
2024
2023
Change
2024
2023
Change
(Pre-tax except for income taxes and totals; $ in millions)
Utility
2Q24 E-LA global agreement to resolve its FRP extension filing and other retail matters
-
-
-
(151)
-
(151)
1Q24 E-AR write-off of a regulatory asset related to the opportunity sales proceeding
-
-
-
(132)
-
(132)
1Q24 E-NO increase in customer sharing of income tax benefits as a result of the 2016–2018 IRS audit resolution
-
-
-
(79)
-
(79)
3Q23 E-AR write-off of assets related to the ANO stator incident
-
(78)
78
-
(78)
78
1Q23 impacts from E-LA storm cost approval and securitization, including customer sharing (excluding income tax item below)
-
-
-
-
(87)
87
Income tax effect on Utility adjustments above
-
20
(20)
95
47
48
1Q23 E-LA income tax benefit resulting from securitization
-
-
-
-
129
(129)
Total Utility
-
(59)
59
(267)
10
(277)
Parent & Other
2Q24 pension lift out
-
-
-
(317)
-
(317)
3Q23 DOE spent nuclear fuel litigation settlement (IPEC)
-
40
(40)
-
40
(40)
Income tax effect on Parent & Other adjustments above
-
(9)
9
67
(9)
75
Total Parent & Other
-
32
(32)
(250)
32
(282)
