Entergy Sets Robust Q1 Outlook, Shares Rise - Analyst Blog
April 16 2014 - 12:00PM
Zacks
Entergy
Corporation (ETR) provided a robust outlook for the first
quarter 2014 as well as boosted its 2014 bottom line expectations
resulting from higher wholesale electricity prices owing to cold
winter weather and limitations of pipeline infrastructure in the
Northeast US. Investors reacted positively to the news pushing
stock prices by 1.4% to close at $71.97 on Apr 15, 2014.
This utility company now expects its first quarter operational
earnings to be about $2.28 per share, exceeding the Zacks Consensus
Estimate of $1.17 and significantly higher than the year-ago profit
of 94 cents. On an as-reported basis, Entergy expects $2.23 of
profit for the first quarter.
For 2014, the company raised its bottom line outlook to $5.55-$6.75
from its previous expectation of $4.60-$5.40.
Entergy, whose fourth quarter 2013 earnings fell 41.9% year over
year primarily due to higher total operating expenses and an
increase in shares outstanding, now registered improved results in
the first quarter in both of its divisions – Entergy Wholesale
Commodities and Utility.
Entergy is well positioned through its geographically-diversified
mix of regulated and merchant operations. The company’s regulated
assets are located primarily in Arkansas, Louisiana, Mississippi
and Texas, and its merchant generation assets are situated mostly
in New York, Massachusetts and Michigan. This insulates Entergy
from regulatory bottlenecks and power-price volatility in any
particular region, helping the company to achieve its targeted
annual compound earnings growth of 6% in the next five years.
The company is slated to report its first quarter earnings on Apr
24, before the opening bell. We remain optimistic for Entergy’s
cost-control initiatives that are expected to boost its upcoming
margins and improve operational efficiency.
The company plans to realign its operations to optimize its
resource-utilization in order to meet the changing business needs.
Entergy has set forth a cost saving target in the range of $200
million to $250 million via its human capital management program to
be implemented by 2015 end.
Entergy currently has a Zacks Rank #2 (Buy). Some better-ranked
stocks in the same industry include Public Service
Enterprise Group Inc. (PEG), NRG Energy,
Inc. (NRG) and NRG Yield, Inc. (NYLD).
All these stocks sport a Zacks Rank #1 (Strong Buy).
ENTERGY CORP (ETR): Free Stock Analysis Report
NRG ENERGY INC (NRG): Free Stock Analysis Report
NRG YIELD INC-A (NYLD): Free Stock Analysis Report
PUBLIC SV ENTRP (PEG): Free Stock Analysis Report
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