Entergy (NYSE:ETR) easily beat analysts’ expectations with its second-quarter results Wednesday, thanks to better-than-expected retail sales during the early-summer heat.
The company reported earnings of $160 million ($0.78/share) for the quarter. A year ago, the company disclosed a loss of $6 million ($0.03/share).
The New Orleans-based company’s adjusted earnings of $364 million ($1.78/share) far exceeded Zacks Investment Research’s consensus estimate of $1.42/share.
“We had a productive second quarter,” CEO Leo Denault said in a statement.
Denault said Entergy had reached a settlement valued at $300 million with the Mississippi Public Service Commission over performance and accounting issues at its 1.43-GW Grand Gulf nuclear plant in the state. The agreement was designed as a global settlement to resolve all disputes between FERC and Entergy subsidiary System Energy Resources Inc., the plant’s majority owner. (See Entergy Offers Regulators $588M to End Grand Gulf Complaints.)
Arkansas regulators and the New Orleans City Council rejected or opted out of similar settlements this week. The Arkansas Public Service Commission said Entergy’s “low-ball” offer did not include a cash refund for Entergy Arkansas’ customers, as did the Mississippi settlement.
Denault told financial analysts during the company’s earnings call Wednesday that the Mississippi commission “recognized the opportunity to deliver meaningful value to customers today, rather than wait for an uncertain outcome potentially years down the road.”
A FERC decision is expected later this fall.
Grand Gulf sells most of the output at wholesale to Entergy’s Arkansas (NYSE:EAI), Louisiana (NYSE:ELC), Mississippi (NYSE:EMP) and New Orleans (NYSE:ENO) operating companies, but it has been the subject of complaints for overcharges because of poor plant operations and incentive pay to company executives. The plant has been offline for several weeks to repair mechanical issues, Entergy said.
Denault said completing the sale of Michigan’s Palisades Nuclear Plant in May to Holtec Decommissioning International represented the “last major milestone” in exiting the merchant nuclear power segment. (See Federal Aid Likely Too Late to Save Palisades, Diablo Canyon Nukes.)
Entergy’s share price closed Wednesday at $117.38, up $2.27 (1.97%) from the previous closed.
